Overview
Tether (symbol: USDT) is a cryptocurrency hosted on blockchains such as Ethereum and Bitcoin, among others. Its tokens are issued by Hong Kong-based company Tether Limited, which is controlled by the owners of Bitfinex. Tether is classified as a stablecoin because it was originally designed to maintain a 1:1 peg with the US dollar, backed by equivalent reserves.
Key Details
| Metric | Value |
|---|---|
| Symbol | ₮ (USDT) |
| Market Cap | $80.46 billion |
| Blockchains Supported | Ethereum, Bitcoin, EOS, Tron, Algorand, and more |
| Website | tether.to |
History and Development
Origins
Tether’s precursor, Realcoin, was announced in July 2014 by co-founders Brock Pierce, Reeve Collins, and Craig Sellars. The first tokens were issued in October 2014 on the Bitcoin blockchain using the Omni Layer Protocol.
Transition to Tether
In November 2014, the project was rebranded as Tether and introduced three fiat-backed stablecoins:
- USDT (USD)
- EURT (Euro)
- JPYT (Japanese Yen)
Bitfinex Partnership
In January 2015, cryptocurrency exchange Bitfinex enabled Tether trading. Despite claims of separation, leaked documents (the Paradise Papers) revealed shared leadership between Bitfinex and Tether Holdings Limited.
Controversies
Reserve Backing Claims
Tether has faced scrutiny over its claim of 1:1 USD backing. Investigations revealed:
- Only 2.9% of Tether was backed by cash (as of May 2021).
- Over 49.6% was backed by commercial paper.
In 2021, Tether settled with the New York Attorney General’s office, paying an $18.5 million fine for misleading statements about reserves.
Market Manipulation Allegations
Researchers suggest Tether was used to inflate Bitcoin’s price in late 2017.
Legal Issues
- April 2019: NYAG accused Bitfinex of covering an $850 million loss using Tether reserves.
- October 2021: Tether paid a $41 million fine to the CFTC for false claims about USD backing.
Functionality
Token Issuance
Tether issues tokens across multiple blockchains, including:
- Omni (Bitcoin)
- ERC-20 (Ethereum)
- TRC-20 (Tron)
Use Cases
- Trading pair for crypto exchanges.
- Hedge against volatility due to USD peg.
FAQ
1. Is Tether fully backed by USD?
No. As of 2021, only 2.9% was cash-backed, with the majority in commercial paper and other assets.
2. Can Tether be redeemed for USD?
Technically yes, but Tether Limited states holders have no contractual right to redemption.
3. Why is Tether controversial?
Due to lack of transparency, market manipulation suspicions, and unresolved audits.
4. What blockchains support USDT?
Ethereum, Bitcoin (Omni), Tron, EOS, Algorand, and more.
👉 Learn more about stablecoins
👉 Bitcoin trading strategies
Conclusion
Tether remains a dominant stablecoin despite controversies. Its integration across major blockchains and exchanges ensures continued relevance, though investors should remain cautious about its reserve transparency and regulatory risks.
Note: All external links (except okx.com) have been removed per guidelines.
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