USDT (Tether) and USDC (Circle) together represent over 90% of the stablecoin market. Both can freeze funds, but they approach blacklisting very differently. Understanding these differences helps you make informed decisions about which stablecoins to hold and how to manage your risk.
Market overview
Before diving into policies, let's understand the scale we're dealing with:
| USDT (Tether) | USDC (Circle) | |
|---|---|---|
| Market Cap | ~$110 billion | ~$25 billion |
| Headquarters | British Virgin Islands | United States (Boston) |
| Chains Supported | 15+ chains | 10+ chains |
| Primary Use | Global trading, emerging markets | US/institutional, DeFi |
| Regulatory Status | Offshore, less regulated | US-regulated, licensed |
Policy comparison
The two issuers have fundamentally different approaches to freezing funds:
Tether's Approach
Proactive- Freezes funds at law enforcement request
- Sometimes freezes proactively during hacks
- Works with global law enforcement
- Has frozen 1,200+ addresses
- Response time: hours to days
Circle's Approach
Conservative- Primarily freezes for OFAC sanctions
- Requires formal legal process
- Focused on US regulatory compliance
- Has frozen ~300 addresses
- Response time: typically slower
Technical differences
Both use similar smart contract mechanisms, but with important differences:
Contract architecture
// Tether uses a simple blacklist mapping
mapping (address => bool) public isBlackListed;
function addBlackList(address _evilUser) public onlyOwner {
isBlackListed[_evilUser] = true;
AddedBlackList(_evilUser);
}
// Can destroy tokens at blacklisted address
function destroyBlackFunds(address _blackListedUser) public onlyOwner {
require(isBlackListed[_blackListedUser]);
uint dirtyFunds = balanceOf(_blackListedUser);
balances[_blackListedUser] = 0;
_totalSupply -= dirtyFunds;
DestroyedBlackFunds(_blackListedUser, dirtyFunds);
}// Circle uses a "blacklister" role
address public blacklister;
function blacklist(address _account) external onlyBlacklister {
_blacklist(_account);
}
function unBlacklist(address _account) external onlyBlacklister {
_unBlacklist(_account);
}
// Note: Circle does NOT have a destroyBlackFunds function
// Frozen funds remain on the blockchain indefinitelyKey technical differences
Fund destruction
Multi-sig requirements
Unfreeze capability
Transparency and reporting
How open are these issuers about their blacklisting activities?
Tether
- Announces major freezes via blog posts
- No regular transparency reports on blacklisting
- Blacklist events visible on-chain
- Limited explanation for individual freezes
Circle
- Publishes transparency reports
- Clear OFAC compliance documentation
- US regulatory filings provide oversight
- More predictable, policy-driven approach
Which is safer?
There's no simple answer—it depends on your situation and risk tolerance:
USDT may be better if you:
- Operate outside the US regulatory sphere
- Need maximum liquidity and trading pairs
- Want faster response to hack recovery
- Accept higher freeze risk for lower regulatory exposure
USDC may be better if you:
- Operate primarily in US/EU markets
- Need regulatory predictability
- Want lower freeze frequency
- Prefer formal legal process protections
Both can freeze you
Don't assume one stablecoin is "safe" from freezing. Both issuers have demonstrated willingness to blacklist addresses. The differences are in frequency and process, not capability.