USDT is a cryptocurrency called a stablecoin that is designed to track the value of 1 U.S. dollar per token.wikipedia+1
Basic definition
- USDT (also called Tether) is issued by a private company named Tether Limited and is pegged 1:1 to the U.S. dollar, targeting 1 USDT ≈ 1 USD.investopedia+2
- It is “fiat‑backed,” meaning the issuer claims to hold reserves such as cash and short‑term U.S. Treasuries to support the tokens in circulation.oobit+1
Purpose and use cases
- USDT gives crypto users a relatively price‑stable asset for trading, payments, and settlements, reducing exposure to the volatility of coins like Bitcoin or Ether.coinspaid+2
- It is widely used as a base trading pair on exchanges and for remittances, cross‑border payments, and as a kind of “digital dollar” in countries with high inflation.polygon+2
How it works technically
- USDT exists as tokens on multiple blockchains, including Ethereum (ERC‑20), Tron (TRC‑20), and others such as BNB Smart Chain, Polygon, and Solana.polygon+2
- New USDT is typically minted when large customers deposit dollars with Tether and is burned (destroyed) when those customers redeem USDT back into dollars.binance+1
Risks and considerations
- USDT is not the same as holding actual USD in a bank; it is a private digital token that aims to track USD’s price but can briefly de‑peg during market stress.coinspaid+1
- Tether publishes reserve reports, but its reserve composition and transparency have been subjects of regulatory and market scrutiny over the years, so users face issuer and regulatory risk in addition to normal crypto risks.moderntreasury+1
- https://en.wikipedia.org/wiki/Tether_(cryptocurrency)
- https://www.investopedia.com/terms/t/tether-usdt.asp
- https://polygon.technology/stablecoins/usdt
- https://www.oobit.com/stablecoin/usdt
- https://coinspaid.com/glossary/what-is-usdt-tether/
- https://www.moderntreasury.com/learn/difference-between-usdc-and-usdt
- https://help.belo.app/en/articles/5416654-what-is-usdt
- https://www.binance.com/en/square/post/20084774273489
- https://tether.to
- https://www.reddit.com/r/Bitcoin/comments/7u3oem/can_someone_please_explain_what_is_the_point_of/