Jump to the walkthroughs:
- Converting on a decentralised exchange
- Converting on a centralised exchange
USDT, or Tether, is the world’s most transacted stablecoin. USDT is meant to always be worth $1.00, its purpose is to be the cryptocurrency to be used for storing or transferring value denominated in USD without the volatility of cryptocurrencies.
There’s a couple of other stablecoins out there. Right now the second most popular stablecoin is the Circle owned USDC.
Both USDT and USDC are IOU stablecoins, which means that they are backed by fiat assets worth enough to match the issuance of new stablecoin tokens.
The collateral is not publicly known except in broad strokes:
- We know that Tether holds a lot of US treasury securities and decreasing amounts of commercial debt papers, but we do not know how are these financial holdings structured, what is done with the earnings those papers might yield and many other things.
- We know that USDC is backed by US treasury securities and some other assets: Report from June 2022
That means that if you hold a stablecoin, you are taking a risk. This is because you cannot know if the collateral of the stablecoin is really in good standing. If it isn’t, you will not be able to exchange your stablecoin for the equivalent value of US dollars and you will lose money.
Stablecoin attacks are non-events until they aren’t
Attacking various stablecoins has been a mainstay in the crypto industry, it happens every now and then. Sometimes it proves justified, the stablecoin de-peggs and its holders may lose money permanently.
Most often it all ends up being a non-event, though. People will flee from one stablecoin to another and after a few weeks the storm blows over.
I think it’s reasonable to flee. The market can test the management of a stablecoin with someone else’s money.
In this guide I will go through the ways of how to convert USDC to USDT, or the other way around - USDT to USDC. There is a couple of fast ways to do that.
Converting stablecoins on a DEX
Should you convert USDT and USDC on DEX or centralised exchange?
You can do both. You can exchange USDT and USDC either on centralised exchanges or you can use DeFi swaps. CEX will be a little cheaper and technically easier.
The reason is that stablecoins are based on different blockchains.
The blockchain you choose matters a lot: A stablecoin on BSC has far lower transaction fees than the same stablecoin on Ethereum, and not all wallets support all variants of stablecoins.
Let’s take SUSHISWAP for instance.
The DEX has a swap between USDC and USDT. In this swap, both stablecoins are on Ethereum.
If you have USDT on Ethereum and you want to get USDC on Polygon, you would have to first buy USDC on Ethereum and then bridge the Ethereum token to Polygon.
CEX lets you do the same conversion in a single step.
That’s including switching the chains.
Centralised exchanges let you deposit USDT on most available blockchains and they trade all of them on the same market. That’s because on a CEX, trading doesn’t happen on-chain, it’s all just numbers printed on screen.
It works the same way if you buy a stablecoin on a CEX. You will only first specify on which chain you want it when you submit a withdrawal request.
Converting stablecoins on a CEX
Converting USDT to USDC on Phemex
The first exchange I’m going to list is Phemex, because they do not require KYC for withdrawing stablecoins.
Phemex doesn’t trade or list any markets denominated in USD, it’s just stablecoins. The majority or markets on Phemex are denominated in Tether. You can’t even deposit or withdraw fiat, so this is not an exchange where you can cash out your stablecoin into fiat currency.
But if all you want to do is swap between USDT and USDC on different blockchains, they do that quickly.
- Here’s the market: USDC/USDT on Phemex
The whole process of depositing, converting and withdrawing took me 10 minutes the last time I did it:
Here’s how to sell your Tether for USDC via Phemex:
Go to Assets > Deposit
Generate a deposit address for the blockchain on which your Tether lives.
The supported blockchains are Ethereum, Tron, Solana, Polygon, Binance Chain and Arbitrum One for USDT and USDC, and also Fantom for USDT.
The deposit will clear after as little as 1 confirmation. I was depositing USDT on BSC so that went pretty fast.
Head over to the USDC/USDT spot market to submit a buy order for USDC.
Link to USDC/USDT here.
The minimum traded amount is 10 USD worth.
Your order is listed just below the chart.
It will show up under Active Orders at first and then will disappear when filled. You can just wait a minute until it fills.
Head over to Assets > Withdrawals.
Select USDC and choose from the different blockchains available.
You will pay a withdrawal fee if you’re not KYC’d, plus there is a minimum withdrawal of 50 USD worth. I was withdrawing into USDC on Polygon with 0.2 USD fee.
Confirm the request via e-mail and 2FA.
In my experience they pay up within a few minutes.
You could do the exact same thing starting from USDC and withdrawing USDT. Phemex likewise does not require KYC for that.
No other stablecoin markets are listed on Phemex though, only this one between USDC and USDT.
Converting USDC and USDT on Bitforex
Just for posterity, Bitforex also lists the spot market for USDC/USDT as Phemex and would be your alternative if for some reason you don’t want to use Phemex.
Bitforex likewise doesn’t trade fiat and doesn’t require KYC. They are a much smaller exchange however and reportedly paint trades copied from other exchanges.
I’d recommend Phemex over them.
Converting several smaller stablecoins into Tether on FTX (Intl and US)
FTX is a low fee exchange that’s available around the world.
The situation with stablecoin trading is exactly the same on both FTX.us and FTX.com.
FTX is a good exchange for cashing out of stablecoin into fiat, for trading larger amounts and for exchanging between more exotic stables than the USDT and USDC.
None of the two versions of FTX lists stablecoin markets except USDT/USD. The trick to converting stablecoins on FTX is in using their open OTC app.
It doesn’t have limits like your usual crypto OTC would have, it’s just that the interface has no charts.
Read below for walkthrough and screenshots.
Stablecoin trading on FTX US or FTX.com
This is how to sell or convert a stablecoin on either of the FTX duo.
Deposit your stablecoin
FTX lets you deposit far more stablecoins than what you can find by browsing through the markets.
- Both FTX platforms support USDT, USDC, BUSD, TUSD and PUSD deposits.
The choice of the blockchains is as you’d expect it: ETH, BSC, SOL, TRX or AVAX for both USDT and USDC, plus also MATIC for USDC.
Trade stablecoins on the open market
The only listed market for stablecoins is Tether/Dollar.
So, if you deposited Tether, you can head over to the market for USDT/USD as you’re used to:
Trade stablecoins OTC
If you deposited another stablecoin, you will need to convert it outside of the listed markets.
FTX runs an automated OTC interface. This OTC interface is open and you won’t face limits on minimum traded volume. You will still trade with zero fees, though - the quote is final like in any other OTC.
The way to access the OTC app from the exchange is buried deep in the top navigation, but it’s available to all FTX traders on these addresses:
You can do all your stablecoin trading here, using your exchange balances.
Request a withdrawal
In my experience they process withdrawals quickly.
Regardless, I think they are a good option only if you are looking to trade a large amount, cash out a stablecoin into fiat, or if you enjoy making your life extra complicated.
The easiest way to swap two stablecoins on different chains is through a centralised exchange.
Phemex is one of the most straightforward and smooth experiences available among CEX platforms.
You can also trade stablecoins quickly with FTX. They are a good option if you want to convert a stablecoin into fiat.