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What is USDT & how does it work?

USDT’s unique feature is the fact that its value is guaranteed by Tether to remain pegged to the U.S. dollar. According to Tether, whenever it issues new USDT tokens, it allocates the same amount of USD to its reserves, thus ensuring that USDT is fully backed by cash and cash equivalents.

What is Tether (USDT)?

Tether ( USDT) is a cryptocurrency stablecoin pegged to the U.S. dollar and backed "100% by Tether's reserves," according to its website. 1 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.

Is USDT a stablecoin?

USDT has since migrated to other blockchains like Ethereum. As we mentioned earlier, USDT is a breed of cryptocurrency called a stablecoin. Cryptocurrencies such as Bitcoin, Ethereum, and many others are notorious for their volatility (i.e., their price fluctuations).

Is USDT backed by legal tender?

As we discussed, Tether Limited claims that USDT is redeemable 1:1 for dollars but is not fully backed by legal tender alone. This ongoing controversy over the coin’s true collateralization means there’s no way to tell if it is fully guaranteed or not.

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