What is cryptocurrency Tether (USDT)
Tether (USDT) is a stablecoin, a type of cryptocurrency that is designed to maintain a stable value relative to a specific asset or currency. In the case of Tether, the stablecoin is pegged to the US dollar, meaning that each USDT token is supposed to be worth one US dollar.
Tether was created in 2014 by a company called Tether Limited, which claims that each USDT token is fully backed by reserves of real-world currency and other assets. According to Tether Limited, the company holds reserves equal to the total number of USDT tokens in circulation, which is intended to ensure the stability of the token’s value.
USDT is built on top of various blockchain networks, including Bitcoin, Ethereum, and Tron, and can be traded on many cryptocurrency exchanges. The use of USDT allows traders to hedge against the volatility of other cryptocurrencies and traditional currencies, such as the US dollar.
One of the criticisms of Tether is that the company’s claims about its reserves have not been independently audited or verified, leading to concerns about the actual level of backing for USDT tokens. Additionally, Tether Limited has faced legal challenges and regulatory scrutiny over the years, including allegations that it artificially inflated the price of Bitcoin in 2017 and concerns over the company’s transparency and management practices.
Despite these criticisms and concerns, Tether has become one of the most widely used cryptocurrencies, with a market capitalization that frequently exceeds $60 billion USD. USDT is used by traders and investors as a way to move funds quickly and cheaply across different cryptocurrency exchanges, and as a way to avoid the volatility associated with other cryptocurrencies.