Over the years, USDT has become increasingly popular among cryptocurrency traders. However, it has also been subject to several controversies. Critics have questioned Tether’s transparency and if the company is actually able to redeem every USDT in circulation for $1 as they claim.
Tether was embroiled in a legal battle with the New York Attorney General’s office (NYAG) from April 2019 to February 2021, when the two parties reached a settlement. Tether paid a $18.5 million fine as part of the agreement. NYAG had accused Tether of making false statements about the backing of its USDT stablecoin.
With questions swirling around Tether and USDT, alternative stablecoins like USD Coin, Pax Dollar, Binance USD and Dai have seen an uptick in demand.
While some people are still hesitant to use it, no other competitor has been able to beat Tether. USDT is by far the largest stablecoin in terms of trading volume, and USDC is its only challenger when it comes to market capitalization.
To answer its critics, Tether has undertaken greater transparency measures. For example, the company posts a detailed breakdown of USDT’s reserve funds on its website and also offers quarterly assurance opinions to demonstrate that it possesses enough reserves to cover all USDT tokens. According to the company, between May 11 and May 15, 2022., 7 billion USDT were redeemed.
Although stablecoins are often thought to be resistant to volatility, holdings are not entirely risk-free–especially when it comes to reserve-backed options like USDT. If the party responsible for redeeming the token is unable to do so with fiat currency, the coin’s value could drop dramatically or even become worthless.
Although USDT has experienced some fluctuations from its $1 peg, it has always recovered back to that value. However, users should still be careful when purchasing stablecoins.
The USDT circulating supply grows as new tokens are minted; it decreases when USDT tokens are redeemed. Unlike other cryptocurrencies, such Bitcoin, there is no limit to how many more USDTs can be created – the number depends on what the market demands.
The USDT market cap has been trending upwards for multiple years now. The Tether (USDT) market cap is closely tied to the amount of USDT tokens in circulation, as the price usually doesn’t see major fluctuations.
Here are some of the most notable USDT circulating supply milestones:
- 1 million – the supply of USDT first exceeded 1 million in January 2016
- 10 million – the USDT supply first reached 10 million in January 2017
- 50 million – the supply of USDT hit 50 million for the first time in March 2017
- 100 million – the first time that USDT hit a supply of 100 million was in May 2017
- 500 million – USDT’s circulating supply hit the 500 million milestone in November 2017
- 1 billion – the first time that USDT reached a circulating supply of 1 billion was in December 2017
- 10 billion – the USDT supply hit the 10 billion milestone for the first time in June 2020
- 50 billion – USDT first reached a supply of 50 billion in April 2021
Tether (USDT) is a stablecoin that’s meant to always be worth $1. It was originally introduced in 2015 by Tether, whose many top executives also work for the major cryptocurrency exchange Bitfinex.
USDT currently heads the stablecoin industry in terms of both trading volume and market capitalization. USDT is collateralized with assets, and its issuer Tether provides a service where USDTennants can be redeemed at anequal value for US dollars.
Tether (USDT) is the largest stablecoin on the market in terms of market capitalization and trading volume. Stablecoins are blockchain-based tokens that are designed to track the price of another asset—the most popular stablecoins are pegged to national currencies like the US dollar, euro and Japanese yen.
USD Tether (USDT) tokens aim to be exchangeable for one US dollar each. To back the USDT tokens in circulation, Tether promotes transparency by holding a reserve of assets.
USDT’s price is close to $1 because it can be redeemed for an equal amount of USD from its issuer, Tether. TheLeast number of USDT that can be redeemed through Tether is 100,000 tokens ($100,000). Sooner or later, most crypto traders will have to convert their USDT into another cryptocurrency or use an exchange that has listings for USDT against regular currency.
Currently, it is quite rare to find an exchange that offers USDT/fiat pairs. Kraken is one such example – as of May 2022, it provides the option to convert USDT to USD or vice versa.
Below are USDT’s most defining features:
- Launched in 2015
- Designed to trade as close to $1 as possible
- The largest stablecoin by market cap and trading volume
- Available on multiple blockchain platforms
- Backed with reserves held by Tether
- USDT tokens can be redeemed against the US dollar
- Used extensively on cryptocurrency exchanges and DeFi protocols
USDT was firstly introduced through the Omni Layer, an solution that allows for tokens to be created. These tokens use the Bitcoin blockchain for added security. USDT tokens originally on this network are still in circulation but have since been moved to other blockchains.
USDT coins are most commonly used to purchase and sell other cryptocurrencies on crypto exchanges. Yet, because USDT is based off blockchains, it can also be utilized for payments. This makes USDT an asset with a more stable value than regular currency that can be transferred all around the world cheaper than traditional methods.
In recent years, another popular use case for USDT has been decentralized finance (DeFi). Even though USDT is backed by centralized reserves (maintained by Tether), DeFi protocols allow users to trade and lending USDT tokens directly through blockchain transactions.
USDT is listed on crypto exchanges worldwide and is involved in more trading than any other crypto asset. This appeals to traders who want the ability to rapidly change between different, high-value cryptocurrencies while still keeping their money on the exchange of their choice. The great majority of USDT trading is done using “traditional” cryptos such as Bitcoin.
Tether crypto is popular for many reasons, one being that not all exchanges support fiat currency deposits and withdrawals. In these cases, USDT is used as a stand-in for regular currency to make cryptocurrency trading possible.
One of the unique aspects of USDT is that it can be used on multiple blockchains. USDT was first issued on Omni Layer, which is a protocol built on top of Bitcoin.
Tether made USDT available on Ethereum to allow new possibilities with smart contracts. The company has been expanding support to blockchain platforms, such as TRON which is one of the most popular for transacting because of its fast transactions and low fees.
Here’s a list of the blockchain platforms where you can find USDT:
- Bitcoin (via the Omni Layer)
- Bitcoin Cash (via the Simple Ledger Protocol)