Tether

Tether (USDT) is a stablecoin: a cryptocurrency designed to hold a steady value of one U.S. dollar. Rather than fluctuating like Bitcoin or Ethereum, each USDT is intended to be redeemable for one dollar, with the issuer holding reserves to back the tokens in circulation. It is the largest stablecoin by circulating supply and one of the most traded assets in all of crypto.

Tether launched in 2014 (originally under the name Realcoin) and is issued by Tether Limited, a company historically associated with the exchange Bitfinex. The company states that tokens are backed by reserves including cash and cash equivalents. Tether's reserve composition and transparency have drawn scrutiny and regulatory attention over the years, including a 2021 settlement with the New York Attorney General, and the company now publishes periodic reserve attestations.

How USDT works

USDT is not a blockchain of its own. It is a token issued on many existing networks — including Ethereum, Tron, Solana, Avalanche, and TON — so it inherits the speed and fees of whichever chain it moves on. Tether Limited mints new tokens when customers deposit dollars and burns tokens when they redeem, aiming to keep the supply matched to reserves. Because supply expands and contracts with demand, USDT has no maximum supply cap.

Role in the ecosystem

USDT functions as the crypto market's working dollar. Traders use it as a quote currency and a place to park value between positions, exchanges use it to offer dollar liquidity without bank access, and in some regions it serves as a practical way to hold or transfer dollar value. Its deep liquidity across virtually every trading venue makes it a core piece of market infrastructure.