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Tether is a blockchain-based cryptocurrency where each coin is supported by an equal amount of traditional fiat currencies like the dollar, euro, or Japanese yen, kept in a dedicated bank account. Tether’s own network uses tokens issued under the ticker symbol USDT.

What are USDT key features and how does it work?

Tether is classified as a stablecoin, designed to keep the value of the cryptocurrency relatively steady, unlike the frequent swings seen with assets such as Bitcoin and Ethereum. The goal is to support practical uses like a medium of exchange and a store of value, rather than treating it only as a speculative asset.

Tether is a fiat-collateralized stablecoin, meaning fiat money such as US dollars, euros, or yen backs the supply of coins in circulation. It contrasts with other types-crypto-collateralized stablecoins that lock cryptocurrency reserves, and non-collateralized stablecoins, which don’t hold collateral but attempt to manage token supply based on prevailing economic conditions, similar to a reserve system.

A key motivation behind Tether’s launch was to create a link between fiat currencies and cryptocurrencies while providing users with transparency, price stability, and low transaction costs. USDT is pegged to the US dollar and is maintained at a 1:1 value relationship to the US dollar. Still, Tether Ltd. does not offer any assurances regarding redemption or exchanging Tether for real-world money-so Tether cannot be swapped for US dollars.

According to research by CryptoCompare, a global cryptocurrency market data provider, Bitcoin paired with Tether makes up most of the BTC traded against fiat or other stablecoins. In February 2021, 57% of all Bitcoin trading activity was tied to the BTC/USDT pair. Tether continues to be a major liquidity source across the cryptocurrency market.

Tether first appeared as RealCoin in July 2014 and was later renamed Tether in November by Tether Ltd., the entity tasked with maintaining fiat currency reserves. Trading began in February 2015.

Where can you buy Tether?

You can purchase Tether (USDT) on many cryptocurrency exchanges, including well-known platforms such as Binance, OKEx, HitBTC, and Huobi Global.

In many cases, the average daily USDT trading volume is comparable to- and sometimes higher than-Bitcoin’s trading volume. This tends to be especially relevant on exchanges that don’t offer fiat-to-crypto pairs, where USDT can serve as an alternative to using US dollars directly.