USDC vs USDT: what is the difference for users in the EU?

USDC and USDT look almost identical in a wallet: both show a balance of dollars, both move on public blockchains and both usually trade at about 1.00. The differences sit underneath, in who issues them, what the reserves are made of, how often they are reported and whether the issuer fits the EU's stablecoin rules. For someone in Bulgaria in 2026, that last point decides which of the two you can actually buy, sell and use on regulated European platforms.

What are USDC and USDT?

Both are dollar stablecoins: tokens designed to be worth one US dollar each. See USDC and USDT in the glossary.

• USDC is issued by Circle. In the EU it is issued by Circle Internet Financial Europe SAS, based in Paris.
• USDT is issued by Tether. Tether's website is operated by Tether Operations, S.A. de C.V.

Both can be sent to any compatible wallet address on the networks each issuer supports. Neither is a bank deposit. Issuers can also act against tokens at specific addresses: Tether's FAQ, for example, says it may seize and destroy tokens in response to demands from government or law enforcement.

How do USDC and USDT compare side by side?

All descriptions come from the issuers' own pages and the ESMA register, checked on 16 September 2026.

Who is behind each stablecoin and how are they regulated?

Under the EU's Markets in Crypto-Assets Regulation (MiCA), a stablecoin that references one official currency is an e-money token. Only an authorised credit institution or electronic money institution may offer one to the public in the EU.

ESMA publishes an interim register of these issuers. In the file dated 9 September 2026, Circle Internet Financial Europe SAS appears as an electronic money institution authorised by the Autorité de Contrôle Prudentiel et de Résolution (ACPR), the French prudential authority, with USDC and EURC white papers registered from 1 July 2024.

The same file contains no Tether entity. That is a factual observation from the register, not a regulator's verdict on USDT. OKX, which holds a MiCA licence in Malta, gives its own explanation: it says USDT cannot be traded by European users on OKX because Tether has not obtained authorisation under MiCA.

For the Bulgarian side of MiCA, see MiCA in Bulgaria.

What backs USDC and USDT?

USDC. Circle says USDC is backed 100% by highly liquid cash and cash-equivalent assets, with holdings equal to or above the tokens in circulation. The majority is invested in the Circle Reserve Fund, a government money market fund registered with the US Securities and Exchange Commission, with daily third-party reporting on the portfolio. Circle discloses reserve holdings weekly, and a Big Four accounting firm gives monthly assurance that reserves exceed circulation. On 14 September 2026 Circle reported 74.2 billion USDC in circulation.

USDT. Tether says every token is backed 100% by its reserves, which include traditional currency, cash equivalents and other assets, including receivables from loans made by Tether to third parties. Its FAQ discusses the bitcoin Tether holds and the "net equity" it keeps as a cushion against bitcoin's volatility. Tether publishes circulation figures, typically daily, and quarterly reserves reports prepared by BDO Italia under standards of the International Auditing and Assurance Standards Board.

What this means in practice: USDC's reserve is limited to cash-like assets and reported monthly. USDT's reserve, by Tether's own description, can include loans and bitcoin, and its reserves reports come quarterly. Neither description tells you the future; both let you judge the type of risk.

What happened to USDT on EU exchanges?

On 17 January 2025 ESMA asked national regulators to ensure that crypto-asset service providers stop services for non-compliant stablecoins as soon as possible and by the end of the first quarter of 2025 at the latest. Sell-only services could continue until then, and "mere custody and transfer" should remain possible. The statement does not name any token.

Platforms then made their own decisions. Examples from their official pages:

1. Bitstamp disabled trading of USDT for customers of Bitstamp Europe S.A. in January 2025, suspended USDT deposits and withdrawals on 5 May 2025 and converted remaining balances to USDC on 6 May 2025.
2. Kraken lists USDT among stablecoins delisted for EEA clients, with Bulgaria named. These assets cannot be traded and can only be deposited or withdrawn, and Kraken does not recommend depositing them.
3. OKX says USDT deposits by European users arrive frozen and cannot be traded, and that it supports USDC and USDG as its dollar stablecoins for the EEA.

The result for Bulgarian users is simple: on MiCA-licensed platforms, USDC is the dollar stablecoin you can buy, sell and convert to euro. Moving USDT through regulated EU services, on the other hand, has become harder.

Do USDC and USDT run on the same networks?

Partly. Circle's FAQ lists USDC as natively supported on dozens of networks, including Ethereum, Solana, Base, Arbitrum, Polygon, OP Mainnet and Stellar. Tether's FAQ lists USDT on blockchains including Ethereum, Solana, Ton, Tron, Algorand and Tezos.

The same token on two networks is not interchangeable by default. USDC sent on Solana arrives only at a Solana address, and USDT sent on Tron arrives only at a Tron address. Before any transfer, confirm the token, the blockchain network and the address format the recipient expects, and test with a small amount.

Which should you use in Bulgaria?

It depends on what you do with the dollars.

1. Receiving money from clients or employers. Ask for USDC if the payer can send it. You can then sell it for euro on any licensed EU platform. If a payer can only send USDT, check first whether your platform accepts the deposit.
2. Converting to euro. A platform authorised under MiCA will usually quote USDC/EUR and not USDT/EUR. See how to buy USDC in Bulgaria for options.
3. Holding for the medium term. Compare reserve composition and reporting frequency, and decide which risk profile you accept.
4. Sending money abroad. Match the stablecoin and the network to what the recipient can receive and cash out. See sending money abroad with stablecoins.

At xChange.bg, for example, whose accounts and conversions are provided by regulated partner Bridge (a Stripe company), incoming money converts to USDC, not USDT.

Does switching from USDT to USDC have tax consequences?

Yes, in Bulgaria. Both tokens are crypto-assets under the Personal Income Tax Act, and exchanging one crypto-asset for another is a taxable exchange. Because both are dollar tokens, the gain or loss in euro usually comes from the EUR/USD rate between the date you acquired the USDT and the date of the swap, plus any fees. Keep records of both legs. The crypto tax guide for Bulgaria explains how gains and losses are netted and declared.