What Is Tether?
Tether (USDT) is a digital currency with a value meant to mirror that of the U.S. dollar. Launched in 2014, the idea behind Tether was to create a stable cryptocurrency that can be used like digital dollars, or “stablecoins.” Tethers are anchored, or “tethered,” to the price of the U.S. dollar.
While Tether initially used the Bitcoin network’s Omni Layer as its transport protocol, Tether is now available as an ERC20 token on Ethereum. In total, Tether is issued on the Bitcoin (both Omni and Liquid Protocol), Ethereum, EOS, and Tron blockchains.
Tether tokens are issued by Tether Limited, which shares a CEO with crypto exchange Bitfinex. Tether had previously claimed that Tether currencies are 100% backed by Tether’s reserves, but after Tether lawyers noted in 2019 that there was only 74% backing of Tether, or a fractional reserve, Tether has noted that the definition of total backing includes loans to affiliate companies.
What Is Tether Used For?
Tether is used as a way to hedge against crypto market volatility due to its stability. Since each USDT token is pegged to one dollar, keeping money in Tether protects it from the usual volatility of the cryptocurrency market. A large part of Bitcoin trading is done in Tether for this reason, as it can be a fiat on- and off-ramp for crypto trading.
How Do You Purchase Tether?
You can purchase Tether on any cryptocurrency exchange that offers it. For the latest list of exchanges and trading pairs for this cryptocurrency, click on our market pairs tab. Remember to do your own research before choosing an exchange.