USDT (Tether) and USDC (USD Coin) are both stablecoins pegged to the U.S. dollar, but they differ in transparency and regulatory compliance. USDT, issued by Tether Limited, is the most widely used stablecoin, especially in trading, but has faced scrutiny for its reserve practices and lack of regular audits. 

In contrast, USDC, issued by Circle in partnership with Coinbase, is known for its transparency, with reserves regularly audited and held in cash and short-term U.S. Treasury bonds, making it increasingly popular in the decentralized finance (DeFi) ecosystem.