Tether (USDT)

Tether (USDT): Meaning and Uses for Tethering Crypto Explained

Tether (USDT) is a cryptocurrency stablecoin pegged to the U.S. dollar and backed "100% by Tether's reserves," according to its website. Tether is owned by iFinex, the Hong Kong-registered company that also owns the crypto exchange BitFinex.

Tether was launched as RealCoin in July 2014 and was rebranded as Tether in November 2014. Originally based on the Bitcoin blockchain, Tether now supports Bitcoin's Omni and Liquid protocols as well as the Ethereum, TRON, EOS, Algorand, Solana, and Bitcoin Cash (SLP) blockchains.

As of January 2023, Tether was the third-largest cryptocurrency after Bitcoin (BTC) and Ethereum (ETH) and the largest stablecoin with a market capitalization of nearly $68 billion. In 2022, Tether's USDT accounted for most of the exchanges out of Bitcoin by value.

Key Takeaways

  • Tether (USDT) is a stablecoin, a type of cryptocurrency pursuing a steady valuation.
  • Tether is used by investors who want to avoid the volatility typical of cryptocurrencies while holding funds within the crypto system.
  • Tether's parent company paid nearly $60 million in fines in 2021 to settle two regulatory probes alleging it mishandled and misrepresented its reserves.
  • Tether has expanded to other geographic areas, including China, Mexico, and the Eurozone.


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Where to Buy Cryptocurrency Tether


Kraken is a United States–based cryptocurrency exchange that offers a safe and easy way to get started with crypto. They accept various payment methods, such as credit card, debit card, and bank transfer, for buying Tether. Visit their website to learn more.


Coinbase is another popular platform where you can buy Tether. Follow these steps to buy Tether on Coinbase:

  1. Create a Coinbase account by signing up on their website or downloading the mobile app.
  2. Add a payment method, such as a bank account or debit card.
  3. Select Tether from the list of assets.
  4. Enter the amount of Tether you want to buy.
  5. Confirm your purchase.


Binance is a centralized exchange that offers the option to buy Tether USDt. Here's how to buy Tether on Binance:

  1. Create a free account on the Binance website or app.
  2. Choose how you want to buy Tether USDt, such as using a credit card, debit card, or third-party payment.
  3. Check the payment details and fees.
  4. Confirm your order at the current price.

Remember that cryptocurrency prices are subject to high market risk and price volatility. Only invest in products you are familiar with and understand the associated risks.

Founders of Tether

Brock Pierce, Reeve Collins, and Craig Sellars

The precursor to Tether, originally named "Realcoin", was announced in July 2014 by co-founders Brock Pierce, Reeve Collins, and Craig Sellars as a Santa Monica based startup.

William Quigley

William Quigley, one of the co-founders of Tether, was also an early investor in PayPal.

He played a significant role in the early days of Tether but left the company in 2015.

Group of Bitcoin enthusiasts and early adopters

Tether was also founded by a group of Bitcoin enthusiasts and early adopters who were passionate about facilitating the use of fiat currencies in a digital manner.

The senior management team at Tether, which has extensive experience in financial services, technology, and compliance, includes:

  • JL van der Velde
  • Giancarlo Devasini
  • Stuart Hoegner
  • Paolo Ardoino
  • Leonardo Real
  • Claudia Lagorio

These individuals drive the future of Tether and are committed to supporting and empowering innovation throughout the blockchain as a digital token built on multiple blockchains.

Tether Roadmap and Future Plans

Tether (USDT) is a stablecoin cryptocurrency that is pegged to the value of the US dollar.

It aims to provide stability and transparency in the volatile cryptocurrency market.

Current Development Goals

  • Release of new products in Q4
  • Launch on Kava platform
  • Token burn
  • Quarterly report
  • Introduction of new trading pairs, such as USDT/ARS and USDT/PLN

Tether has been actively involved in various events, AMA sessions, airdrops, and trading battles to engage with the community and promote its brand.

Stability and Transparency

Tether's primary feature is its stability, as it is directly linked to the value of the US dollar on a 1:1 basis. For every USDT token in circulation, an equivalent amount in US dollars is held in reserves by the company.

The company, Tether Limited, regularly publishes audit reports to ensure transparency and promote widespread adoption.

However, Tether has faced controversy and skepticism regarding the transparency of its reserves.

Importance of Tether

Tether plays a vital role in the global cryptocurrency ecosystem due to its wide usage as a hedging tool and medium of exchange on many cryptocurrency exchanges. It provides an easy exit strategy for risk-averse investors and traders looking to shield themselves from market volatility.

Despite the controversy, Tether remains the most widely used stablecoin in the cryptocurrency market, with a significant market capitalization.


Tether aims to maintain stability and transparency in the cryptocurrency market by pegging its value to the US dollar.

It has set development goals, engages with the community through various events, and emphasizes transparency through regular audit reports. Despite skepticism, Tether continues to be a prominent player in the crypto ecosystem.

What is Tether?

Cryptocurrencies, like Bitcoin and Ethereum, have been embraced for many reasons, one of which is their potential for significant financial gains due to their volatile nature. However, this volatility can also cause uncertain market conditions, leading to concerns from investors. This is where Tether, a kind of cryptocurrency called a 'stablecoin', comes into play as it offers a solution to this volatility.

One of the reasons that Tether stands out from other cryptocurrencies is its structure. Tether is designed to maintain a fixed value, rather than experiencing fluctuations in price. The value of each Tether coin is attached to a reserve of real-world assets like dollars or euros, hence it’s also known as a "pegged" cryptocurrency. This mechanism aims to combine the inclusive nature of cryptocurrencies with the stable and predictable value of fiat currencies (traditional currencies that are government issued, like the dollar or euro).

The concept behind Tether is rather straightforward. The organization behind Tether holds assets in a bank account that equals or surpasses the number of Tether coins in circulation. So, in theory, for every Tether coin, there's a real dollar (or another fiat equivalent) kept safe in a bank.

This scheme offers several benefits. By pegging its value to a stable reserve, Tether largely mitigates the risk of price fluctuations and volatility, becoming a safe harbor in the stormy seas of cryptocurrency markets. When other cryptocurrencies' prices are dropping, traders often convert their holdings into Tether, effectively 'tethering' them to the stability of fiat currencies.

Moreover, Tether facilitates easier transactions between different cryptocurrencies. Since it’s pegged to the dollar, it allows traders to move their holdings around swiftly without needing to convert them back and forth into fiat currency, which can be a laborious and expensive process due to fees associated with such conversions. As such, Tether and other stablecoins have become an essential part of the cryptocurrency ecosystem.

However, it's important to recognize that Tether, like any other cryptocurrency, isn't without its risks. Although it's designed to be stable, the guarantee of its value is reliant on Tether Ltd’s promise that they hold the necessary reserves at all times. This requires trust from the users, something that has been questioned amid debates about transparency and accountability in the past.

In conclusion, Tether offers a way to enjoy the benefits of both the crypto and traditional financial world. Its unique structure combines the innovation of digital assets with the stability of fiat currency, presenting an interesting twist on cryptocurrencies for traders and investors. Tether may signify what could become a growing trend in the crypto space – a trend towards stability amidst a highly volatile market.

How does Tether work?

If you've been following the world of cryptocurrencies, you've probably come across the name 'Tether', commonly known by its ticker symbol, 'USDT.' Tether is a specific type of cryptocurrency that differs from others like Bitcoin, Ethereum, or Dogecoin because of how its value is managed.

The essential thing to understand about Tether is that unlike other cryptocurrencies whose values can swing wildly in short periods, each unit of Tether - each USDT - is intended to be equivalent to one US Dollar. You might think of USDT as a digital twin of the dollar.

The mechanism behind this equality is where Tether gets its name. It is, quite simply, 'tethered' to the dollar. This means that the company behind Tether holds an amount of US Dollars in reserve that is equal to the number of USDT in circulation. This match in value is intended to keep the price of Tether stable and avoid significant fluctuations.

One common analogy used to describe Tether's role in the cryptocurrency market is that of a 'stablecoin.' Just like an anchor stabilizes a ship amidst the stormy seas, Tether, or other stablecoins, aim to provide a measure stability in the often-volatile crypto markets.

Want to get your hands on Tether? You can buy and sell Tether on most cryptocurrency exchanges, using either traditional fiat currencies (like the US Dollar, Euro, etc.) or other cryptocurrencies. Just like using a foreign exchange booth in an airport, you’ll be able to trade your currency for Tether and vice versa. With the 'tether' to the dollar, investors often use it as a safe haven during turbulent market periods or as a method to move money across different exchanges.

However, despite its widespread use, Tether has not been without controversy and skeptics. Critics question the transparency and reliability of the company's claims about its dollar reserves backing each USDT. So, as with any financial decision, it's always crucial to do your own research before buying or using Tether.

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The Controversies Surrounding Tether

Tether, often represented as USDT in the cryptocurrency market, is what we call a 'stablecoin.' The main idea behind a stablecoin is to mirror the value of a traditional and stable asset, usually the US dollar. In theory, this is a promising concept as it aims to combine the best of both worlds: the operational flexibility of cryptocurrencies and the relative stability of fiat currencies like the US Dollar. However, it's important to address the elephant in the room: the ongoing controversy surrounding Tether. The crux of the controversy lies in Tether's claim of a 1:1 backing with the US Dollar. Hence, for every Tether (USDT) in circulation, there should be an equivalent dollar held in reserve. The idea is to ensure that Tether can maintain its peg to the dollar, thereby making it a stablecoin. But the question critics often pose is: Does Tether actually hold enough dollars to back every USDT in circulation? This has stirred widespread controversy and speculation because Tether has been considerably resistant to third-party audits, which would assist in verifying their claims.

Hesitation to Permit Audits

A key factor breeding this suspicion has been Tether's reluctance to permit regular audits by independent third-party entities. In any financial institution, audits are common practice as they promote transparency and trust among stakeholders. For Tether, given that it claims to mirror the US dollar 1:1, an audit would be an effective way to reassure its users that each USDT is indeed backed by an actual dollar. However, with Tether showing hesitation to allow such audits, this has naturally led to skepticism among some users and critics. This lack of transparency raises questions about whether Tether can uphold its bold claim of 1:1 backing and equivalency. Therefore, although the concept of Tether is appealing and has significant potential in the cryptocurrency arena, its credibility continues to be under close scrutiny. In summary, while Tether attempts to blend the benefits of cryptocurrencies and fiat currencies, uncertainties surrounding the full backing of each USDT cast a questioning light on its operations. Until there is clarity on this issue, such controversies are likely to persist.

The Advantages and Uses of Tether

Tether (USDT) plays a vital role in the field of cryptocurrencies through the important function of providing liquidity. Liquidity, for those new to the term, refers to the ease with which an asset or security can be bought or sold in the market without affecting its price. High liquidity indicates a high number of buyers and sellers, resulting in swift and easy transactions.

Tether (USDT) plays a vital role in the field of cryptocurrencies through the important function of providing liquidity. Liquidity, for those new to the term, refers to the ease with which an asset or security can be bought or sold in the market without affecting its price. High liquidity indicates a high number of buyers and sellers, resulting in swift and easy transactions.

Tether, being a type of cryptocurrency known as a 'stablecoin', is designed to maintain a steady value. Unlike Bitcoin or Ethereum, whose values can swing unpredictably, Tether's value is typically pegged to the US dollar. This means that one Tether generally equals one US dollar. This lack of volatility makes Tether a very useful tool in the crypto market.

During periods of high volatility in the cryptocurrency world, when the values of cryptocurrencies such as Bitcoin and Ethereum are fluctuating wildly, traders often need a 'safe harbor'. This is where Tether comes in. Traders can sell their volatile cryptocurrencies for Tether, effectively protecting their assets from significant value drops. This ability to 'weather the storm' is one of the many ways Tether provides a level of stability in a volatile market.

Tether’s ability to be easily moved between different cryptocurrency exchanges adds another layer of convenience for traders. With Tether, traders can quickly move funds across different platforms, to take advantage of differing exchange rates and trading opportunities. This easy portability and consistent value make Tether an essential tool in the cryptocurrency markets.

In a nutshell, Tether provides traders and investors with a safe and stable currency that can be used to manage risk during volatile periods. Its consistent value and ease of transfer between exchanges render it an important tool in any cryptocurrency trader's portfolio.