Stablecoin Comparison: USDC vs USDT vs DAI vs PYUSD vs USDB

Major Stablecoins Compared

The stablecoin market has grown to over $200 billion in total capitalization, with more than a dozen projects competing for adoption across payments, trading, DeFi, and savings. While most stablecoins target a 1:1 peg to the US dollar, they differ significantly in how they achieve that peg, where they operate, and what risks they carry.

The following table provides a high-level snapshot of the most widely used stablecoins. Each row is explored in greater detail throughout this guide.

For a detailed head-to-head between the two largest stablecoins, see our USDC vs USDT comparison tool.

Types of Stablecoins

Stablecoins fall into four broad categories based on how they maintain their dollar peg. Understanding the category helps you assess the risks you are taking on when you hold a given token.

Fiat-Backed Stablecoins

Fiat-backed stablecoins are issued by a centralized entity that claims to hold one dollar of reserves for every token in circulation. USDC, USDT, PYUSD, FDUSD, TUSD, and USDB all follow this model. Reserves typically consist of US Treasury bills, cash deposits at regulated banks, and short-term money market instruments. The quality and transparency of those reserves varies significantly between issuers: Circle publishes monthly attestations from Deloitte, while Tether provides quarterly reports from BDO Italia.

Crypto-Backed Stablecoins

Crypto-backed stablecoins use on-chain collateral instead of bank deposits. DAI is the best-known example: users lock ETH, stETH, USDC, and other assets into MakerDAO vaults, which must be overcollateralized (typically at 150% or more) to absorb price volatility. The advantage is decentralization and on-chain transparency. The tradeoff is smart contract risk and the possibility of cascading liquidations during sharp market downturns.

Algorithmic Stablecoins

Algorithmic stablecoins attempt to hold their peg through code-based supply adjustments without full collateral backing. The most prominent example was UST (TerraUSD), which collapsed in May 2022 in a catastrophic "death spiral" that destroyed roughly $40 billion in value. The UST collapse demonstrated that undercollateralized algorithmic designs are inherently fragile. Most surviving stablecoins have since moved toward full or overcollateralized models.

Commodity-Backed Stablecoins

Commodity-backed stablecoins are pegged to physical assets rather than the dollar. PAXG (Paxos Gold) is the primary example: each token represents one troy ounce of gold held in London Brink's vaults. These tokens serve a niche use case for investors who want on-chain exposure to commodities without the logistics of physical custody.

Backing and Reserves

The safety of any fiat-backed stablecoin ultimately depends on what backs it. Not all reserves are equal: US Treasury bills are considered the safest and most liquid, while commercial paper and corporate bonds carry more credit risk.

USDC and USDT both hold the majority of their reserves in T-bills, though Tether previously held significant amounts of commercial paper (a practice it has since reduced). PYUSD reserves are held by Paxos and invested primarily in T-bills and reverse repurchase agreements. USDB, issued by Flashnet, is backed by cash reserves and designed specifically for the Bitcoin ecosystem via Spark.

For crypto-backed stablecoins like DAI, reserves are verifiable on-chain. Anyone can inspect MakerDAO's vaults to see exactly how much collateral backs the supply. However, DAI's increasing allocation to real-world assets (T-bills held through off-chain trustees) introduces some of the same trust assumptions as fiat-backed models.

For a deeper look at reserve composition and audit practices, see our stablecoin safety and risk checker.

Chain Availability

Where a stablecoin is available determines its utility for different use cases. The following table shows chain support across major stablecoins.

USDT and USDC have the broadest chain coverage, each supporting 16 or more networks. This makes them the default choices for cross-chain activity. DAI is primarily an Ethereum ecosystem token available on major L2s. PYUSD is currently limited to Ethereum and Solana. USDB is unique in operating natively on Bitcoin through the Spark protocol, enabling fast, low-cost stablecoin transfers on the Bitcoin network without bridging to other chains.

Regulatory Status

Regulation is one of the fastest-moving dimensions of the stablecoin landscape. The level of regulatory oversight affects everything from institutional adoption to the likelihood of a stablecoin surviving a crisis.

USDC is issued by Circle, a US-based company that holds state money transmitter licenses and has filed for an IPO with the SEC. PYUSD is issued by Paxos, which is regulated by the New York Department of Financial Services (NYDFS), one of the strictest financial regulators in the US. FDUSD is issued by First Digital, regulated in Hong Kong. USDB is issued by Flashnet through a regulated framework.

USDT is issued by Tether, which is incorporated in the British Virgin Islands and operates with less direct US regulatory oversight. Tether paid an $18.5 million settlement to the New York Attorney General in 2021 over reserve misrepresentation claims. DAI, as a decentralized protocol, has no single regulated issuer: governance decisions are made by MKR token holders.

The EU's Markets in Crypto-Assets (MiCA) regulation, which took effect in 2024, establishes specific requirements for stablecoin issuers operating in Europe. In the US, comprehensive federal stablecoin legislation remains under development.

Use Cases by Stablecoin

Different stablecoins excel in different contexts. Here is a practical breakdown by use case:

Payments and merchant settlement:

• USDC is preferred for compliance-sensitive payment flows
• USDT on Tron dominates peer-to-peer transfers in emerging markets
• USDB on Spark enables instant, near-free stablecoin payments on Bitcoin

Trading and exchange activity:

• USDT accounts for roughly 70% of global crypto trading volume
• FDUSD has grown as a trading pair on Binance
• USDC is the standard on US-regulated exchanges like Coinbase

DeFi lending and yield:

• USDC is preferred collateral in lending protocols like Aave and Compound
• DAI is deeply integrated into the MakerDAO and Ethereum DeFi ecosystem
• USDT has deep liquidity in Curve stablecoin pools

Savings and holding:

• USDC and PYUSD offer the strongest regulatory protections for long-term holders
• DAI provides decentralization for users who want to avoid centralized issuer risk
• USDB provides a Bitcoin-native option for saving in dollars without leaving the Bitcoin ecosystem

How to Choose a Stablecoin

The right stablecoin depends on your specific needs. Consider these factors when making your choice:

If regulatory compliance matters (business payments, institutional treasury, audit trails): choose USDC or PYUSD. Both are issued by US-regulated entities with frequent attestation reports.

If you need maximum liquidity and the widest trading pair coverage: USDT is the clear leader. It dominates global exchange volume and is available on virtually every platform.

If decentralization is your priority: DAI is the leading option. Its collateral is verifiable on-chain and governance is distributed among MKR holders, though its growing RWA allocation introduces some centralization tradeoffs.

If you want stablecoins on Bitcoin: USDB is the only stablecoin operating natively on the Bitcoin network through Spark. It enables instant, near-zero-fee transfers without bridging to Ethereum or other chains.

Many experienced users hold multiple stablecoins to diversify issuer risk. No single stablecoin is risk-free: each carries its own combination of counterparty risk, regulatory risk, and technical risk. The interactive comparison tool above can help you filter and sort based on the factors that matter most to your situation.

Frequently Asked Questions

What is the safest stablecoin?

There is no single "safest" stablecoin. USDC is often cited for its regulatory compliance, monthly Big Four attestations, and direct redemption mechanism. PYUSD benefits from NYDFS regulation through Paxos. USDT has the largest market cap and deepest liquidity but less regulatory oversight. DAI offers decentralization but carries smart contract risk. The best approach for most users is to diversify across multiple stablecoins rather than concentrating in one.

Which stablecoin has the largest market cap?

USDT (Tether) has the largest market cap at approximately $140 billion, making it the dominant stablecoin by a wide margin. USDC (Circle) follows at roughly $55 billion. DAI sits at around $5 billion, with FDUSD, PYUSD, and others trailing further behind. Market cap rankings can shift over time, so always check current figures on a data aggregator like CoinGecko or CoinMarketCap.

What is the difference between USDC and USDT?

Both are fiat-backed stablecoins pegged to the US dollar, but they differ in transparency, regulation, and usage patterns. USDC is issued by Circle (US-regulated, monthly Deloitte attestations, SEC IPO filing). USDT is issued by Tether (BVI-based, quarterly BDO Italia attestations, NYAG settlement history). USDT has more liquidity and trading volume globally, while USDC is preferred for compliance-sensitive use cases. For a detailed breakdown, see our USDC vs USDT comparison.

Are stablecoins regulated?

Regulation varies by issuer and jurisdiction. USDC (Circle) holds US state money transmitter licenses and has filed for an IPO. PYUSD (Paxos) is regulated by the NYDFS. FDUSD (First Digital) is regulated in Hong Kong. USDT (Tether) is based in the British Virgin Islands with less direct US oversight. DAI has no centralized issuer to regulate. The EU's MiCA regulation establishes stablecoin rules for Europe, while US federal legislation remains in development.

Can stablecoins lose their peg?

Yes. Stablecoins can and do depeg. USDC briefly fell to $0.87 during the Silicon Valley Bank collapse in March 2023 before recovering once the FDIC backstopped deposits. USDT has experienced smaller depegs during periods of market stress. UST collapsed entirely in May 2022, losing its peg permanently. Well-collateralized stablecoins with strong redemption mechanisms tend to recover quickly, while undercollateralized or algorithmic designs may not recover at all.

What is a decentralized stablecoin?

A decentralized stablecoin is not issued by a single company. Instead, it is created through smart contracts and governed by a distributed community. DAI is the primary example: users mint DAI by depositing collateral into MakerDAO vaults, and governance decisions are made by MKR token holders. The advantage is censorship resistance and on-chain transparency. The tradeoffs include smart contract risk, governance risk, and the complexity of maintaining a stable peg without a centralized issuer standing ready to redeem tokens for dollars.

Which stablecoin is best for payments?

It depends on the context. For regulated merchant payments and business settlement, USDC is generally preferred due to its regulatory clarity and growing adoption by payment processors. For peer-to-peer transfers in emerging markets, USDT on Tron is dominant because of its extremely low fees. For Bitcoin-native payments, USDB on Spark offers instant transfers with near-zero fees without requiring users to bridge to another blockchain.

What is USDB?

USDB is a fiat-backed stablecoin issued by Flashnet that operates natively on Bitcoin through the Spark protocol. Unlike stablecoins that run on Ethereum or Solana, USDB is built for the Bitcoin ecosystem. It enables instant, near-zero-fee dollar transfers on Bitcoin without bridging to another chain. USDB is backed by cash reserves and issued through a regulated framework, making it a compliant option for users who want stablecoin functionality within the Bitcoin network.

This tool is for informational purposes only and does not constitute financial advice. Stablecoin data is approximate and based on publicly available information as of early 2026. Market caps, reserve compositions, and regulatory statuses change frequently. Always verify current data on the issuer's transparency page before making financial decisions.