What is USDT?
USDT is the currency code for the United States dollar Tether token, a stablecoin issued by Tether Limited and tied to a real-world currency one to one.
Vahe HakobyanEditor-in-chief
Updated Oct 5, 20262 min readFact-checked
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- Tether Limited issues USDT, the United States dollar Tether token.
- Tether was created to provide a stable cryptocurrency backed by reserves.
- Tether says its reserves back every token 100 percent.
- Tokens exist on several blockchains, including Ethereum, Tron and Solana.
- Critics question whether Tether's claimed fiat reserves can be verified.
USDT is a cryptocurrency issued by Tether Limited. It belongs to a group called stablecoins. A stablecoin is a digital currency designed to hold a value that stays steady against the US dollar. Tether was created to provide a stable cryptocurrency backed by reserves.
Tether Limited launched Tether in 2014. The first Tether tokens were issued on October 6, 2014 on the bitcoin blockchain.
How does USDT work?
Tether says all Tether tokens are backed 100% by Tether's reserves. Tether only issues new tokens when customers who have completed its KYC procedure request and purchase them. Tether tokens exist on multiple blockchains, including Ethereum, Tron and Solana.
How do people use USDT?
When traders shift between crypto-assets and exchanges, they rely on USDT to sidestep volatility. Tether says it gives traders, merchants and funds a way to leave market positions while keeping price swings low.
What are the risks and limits of USDT?
Critics question whether Tether's claimed fiat reserves can be verified and whether the company is transparent about them. The CFTC penalized Tether in 2021 because its reserves were fully backed on only 27.6% of days between 2016 and 2018.
How is USDT different from other cryptocurrencies?
Tether says USDT is pegged to a fiat currency and aims for price stability, unlike other cryptocurrencies. Each Tether token is tied to a real-world currency at a ratio of one to one.
