What is USDT (Tether) Stablecoin

USDT is a cryptocurrency that belongs to the so-called stablecoin category. Unlike Bitcoin or Ethereum, which experience significant price volatility, USDT is designed to maintain stable value by pegging to fiat currency (primarily the US Dollar). This means one USDT is always designed to be worth approximately one US dollar, providing stability in the often turbulent crypto market.

As of 2024, USDT has become the third-largest cryptocurrency by market capitalization and the largest stablecoin in the market. With over 350 million global users, USDT has established dominance in the crypto ecosystem, with trading volumes exceeding Bitcoin since 2019.

USDT operates on a simple principle: for every USDT issued, Tether Limited claims to hold one unit of corresponding currency as reserves. This creates a 1:1 backing ratio that helps maintain price stability. The company uses a system called "Proof of Reserves" to demonstrate that all tokens in circulation are fully backed by reserves.

Initially, USDT was only issued on the Bitcoin blockchain through the Omni Layer protocol. However, as the ecosystem evolved, Tether has expanded to support multiple blockchains, including:

This multi-chain approach provides users flexibility when transferring and storing USDT, allowing them to choose networks based on transaction speed, fees, and other preferences. Each blockchain has its own implementation of USDT, but they all represent the same underlying asset - a USD-backed token.

We recommend purchasing USDT stablecoin through digital currency exchanges.