Tether (USDT) is a type of cryptocurrency known as a stablecoin. It was launched in 2014 by a company called Tether Limited.
The main goal of Tether’s founders was to create a stable cryptocurrency that is pegged to a fiat currency, usually the US dollar (USD). Each USDT token is to be backed by an equivalent amount of USD held in reserve by Tether Limited, with a target value ratio of 1:1.
Why has Tether become so popular?
Tether is often used as a medium of exchange and store of value in the cryptocurrency market. Traders and investors often use USDT as a way to quickly move funds between different cryptocurrencies and exchanges, as it provides a stable value that is not subject to the price volatility of other cryptocurrencies.
Another feature that made users catch an eye on Tether – it is a stablecoin that is designed to maintain a stable value by being pegged to a fiat currency, usually the US dollar (USD). This stability is achieved by Tether Limited holding sufficient reserves to back the USDT tokens issued.
Traders and investors often use Tether as a hedge against the price volatility of other cryptocurrencies. In times of high volatility, they can convert their holdings into USDT to avoid potential losses.
In addition, Tether transactions can be processed quickly across various blockchain networks and the fees associated with sending Tether are typically lower than traditional banking systems or some other popular cryptocurrencies.
Within last years Tether became widely accepted on various cryptocurrency exchanges and is often used as a trading pair against other cryptocurrencies. And this stablecoin is available on multiple blockchain networks, including Ethereum (ERC-20), Tron (TRC-20) and others, enabling interoperability and wider use.
Transparency and regulations
Tether Limited claims to maintain transparency by providing real-time updates on the total amount of USDT in circulation and the reserves backing these tokens.
However, Tether faced some controversy and regulatory investigations in the past, as the company claimed to have sufficient reserves to back all USDT tokens issued.
