Tether (USDT)
Tether (USDT) is a cryptocurrency designed to maintain a stable value by mirroring the value of the U.S. dollar. It belongs to a category of cryptocurrencies known as "stable coins," which aim to provide the benefits of digital currency while minimizing the volatility typically associated with cryptocurrencies. Tether is the most prominent stable coin and is widely used as a dollar substitute across various cryptocurrency exchanges.
The concept and purpose of Tether
Tether was created to offer stability in the otherwise volatile world of cryptocurrencies. By anchoring its value to national currencies like the U.S. dollar, the Euro, and the Yen, Tether provides a stable medium of exchange that can be used similarly to digital dollars. This stability is achieved by Tether Limited, the company behind Tether, which claims to back each USDT token with an equivalent amount of fiat currency held in reserve.
| Ticker | USDT |
| Category | Stablecoins |
| Website | https://tether.to/ |
| @Tether_to | |
| Contract Addresses | |
|---|---|
| ethereum | 0xda...c7 Copied! |
| aptos | 0x35...2bCopied! |
| tron | TR...6tCopied! |
| avalanche | 0x97...c7Copied! |
| near-protocol | us...arCopied! |
| solana | Es...YBCopied! |
| kava | 0x91...9cCopied! |
| celo | 0x48...5eCopied! |
| the-open-network | EQ...DsCopied! |
The role of Tether in cryptocurrency exchanges
Tether plays a crucial role in providing liquidity to cryptocurrency exchanges, especially those that may face challenges in dealing directly with traditional banks. By using Tether, exchanges can facilitate the movement of fiat currency into and out of the exchange ecosystem more efficiently. This capability is particularly valuable for users who wish to trade cryptocurrencies without the delays and costs associated with traditional banking systems.
Issuance and governance of Tether
Tether is issued by Tether Limited, a company incorporated in Hong Kong and governed by the laws of the British Virgin Islands. The company is responsible for maintaining the reserves that back the USDT tokens and ensuring the stability of the currency. Jan Ludovicus van der Velde, the CEO of Tether Limited, is also the CEO of the cryptocurrency exchange Bitfinex, which has been closely associated with Tether.
How Tether works
Tether operates on blockchain technology, similar to other cryptocurrencies, ensuring transparency and security in transactions. USDT can be used on various exchanges, including Bitfinex, Poloniex, and Bittrex, to purchase other cryptocurrencies like Bitcoin. It can also be easily transferred between exchanges and wallets that support the Omni Layer protocol.
Transaction fees and conversion
Tether itself does not impose transaction fees, although external wallets and exchanges may charge fees for transferring USDT. To convert USDT to USD and vice versa, users can utilize the Tether.to platform, which charges a small fee for these conversions. Additionally, the platform allows for the direct conversion between USDT and a user's bank account.