Tether (USDT)

Tether (USDT) is the world’s first and most widely used stablecoin, pegged 1:1 to the U.S. dollar. Launched in 2014, Tether has become the backbone of crypto trading, with the highest daily trading volume of any cryptocurrency.

What is Tether?

USDT is a fiat-backed stablecoin, designed to maintain a stable value of $1 per token.
It’s issued by Tether Limited, a company historically connected to the Bitfinex exchange.

Launch year: 2014
Issuer: Tether Limited
Peg: 1 USDT = 1 USD
Reserves: mix of cash, U.S. Treasuries, and other assets

How Does Tether Work?

Issuance: new USDT is created when users deposit USD (or equivalents) with Tether.
Redeemability: users can exchange USDT back for USD, though large-scale redemptions are limited.
Multi-chain: USDT exists on Ethereum, Tron, Solana, Algorand, and more.
Utility: mainly used for trading and settlement, not long-term savings.

Why is Tether Important?

Liquidity leader: highest daily volume, even more than Bitcoin.
Trading pair: most exchanges use USDT as a base pair for altcoins.
Cross-chain flexibility: available on almost every major blockchain.
Market stability: often used as a safe haven during volatile markets.

Tether Use Cases

Crypto trading: hedge against volatility while staying in crypto.
Cross-border transfers: cheaper than traditional banking.
DeFi protocols: lending, borrowing, and liquidity pools.
Stable payments: merchants can accept crypto without price risk.

Risks of Tether

Reserve transparency: Tether has faced criticism for lack of full audits.
Regulatory scrutiny: U.S. and EU regulators continue to investigate its operations.
Centralization: Tether Limited can freeze addresses.
Competition: faces rivals like USDC and decentralized stablecoins like DAI.

Lanzo Tip 🪙

USDT is the most liquid stablecoin — great for trading and fast transfers. But if you want maximum transparency, you may prefer alternatives like USDC.