Mike Smith
Feb 10
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Tether (USDT) is a stablecoin, a cryptocurrency whose value is pegged to the US dollar at a ratio of 1:1. Launched in 2014, USDT has become the most popular stablecoin on the market due to its versatility and wide distribution.
The stability of Tether's value is supported by reserves, including traditional currency, cash equivalents, and other assets. However, the transparency of these reserves often raises questions. Insufficient openness of the company issuing USDT periodically becomes a cause for discussion, affecting market volatility.
USDT does not have its own blockchain - it is issued on existing networks. Initially, it worked on the Omni Layer protocol in the Bitcoin blockchain, but over time it spread to Ethereum, Tron, Algorand and others. This makes Tether a convenient tool for quickly moving funds in the crypto industry.
USDT's high liquidity allows traders to instantly exchange assets without having to convert them to fiat. It is also used for international payments, lending in DeFi applications, and hedging risks in the cryptocurrency market.
Tether's competitors include USD Coin (USDC), Dai (DAI), and Binance USD (BUSD). The main differences between them are the degree of transparency, the number of blockchains supported, and regulatory requirements. USDC and BUSD focus on full reserve provision and audits, while Tether maintains a dominant position due to its wide availability and liquidity.
USDT can be purchased on cryptocurrency exchanges in exchange for fiat money or other cryptocurrencies. Both hot wallets (e.g. Metamask, Trust Wallet) for quick access and cold wallets (Trezor, Ledger) for maximum security are suitable for storage.
Using USDT requires caution. It is important to check addresses before transactions, avoid transferring private keys to third parties, and not connect the wallet to dubious sites.
Despite its popularity, Tether regularly faces criticism. The company does not conduct full independent audits, and the structure of its reserves remains opaque. There are also concerns that USDT may influence the price of Bitcoin due to the presence of digital assets in its reserves.
Regulation remains one of the key challenges for Tether. The introduction of new regulations in various countries may affect the availability of USDT and its dominant position. Some major platforms are already considering abandoning this stablecoin, while others are waiting for further developments. If trust in Tether weakens, this could lead to serious consequences for the entire crypto market, causing volatility and a lack of liquidity.
