USDT vs USDC vs DAI: stablecoins compared for Indian users
How USDT, USDC and DAI differ: who issues them, how they hold their value, which networks they run on, the risks, and how stablecoins are taxed in India.
- Checked against the rules: Oct 2026
- Sources cited · No buy or sell calls
The three at a glance
| USDT | USDC | DAI | |
|---|---|---|---|
| Issuer | Tether | Circle | MakerDAO protocol (now part of the Sky ecosystem) |
| Backing | Company reserves | Company reserves | Crypto collateral in smart contracts |
| Popular networks | Tron, Ethereum, others | Ethereum, Base, Solana, others | Ethereum and layer 2s |
| Common use in India | Exchanges and P2P | DeFi and onchain apps | DeFi |
How they hold $1
- Reserve-backed (USDT, USDC): for each token, the issuer says it holds about a dollar in cash, treasury bills or similar assets. You rely on the company and its banks.
- Crypto-backed (DAI): users lock more crypto than they borrow. If collateral falls too far, it's sold automatically. You rely on the smart contracts and the collateral holding value.
The risks
- Depeg: a stablecoin can trade below $1 during a crisis, sometimes for days.
- Issuer risk: freezes, banking problems or regulatory action can affect reserve-backed coins.
- Wrong network: sending USDT on the wrong network is a common mistake. Networks explained.
Why USDT costs more in India
On Indian exchanges USDT often trades above the dollar rate because of local demand. Track it on our USDT premium index.
Tax
Stablecoins are VDAs. Selling them for rupees or swapping them is taxable at 30% plus cess on any gain, with 1% TDS. USDT in India.
Sources
Was this guide helpful?