What is Tether (USDT)?

Tether aims to provide a simple interface for businesses and individuals to access a blockchain-based cryptocurrency that is always valued at a 1-to-1 ratio with the US dollar.

What is Tether?

Icon	Symbol	Initial release date	Algorithm type	Max. supply
	USDT, ₮	2014	n/a	Varies

Tether (USDT) is a cryptocurrency in the category known as “stablecoins”. It’s operated by a company called Tether, based in Hong Kong.

Tether coins are designed to remain valued at US$1 each. It accomplishes this by backing the circulating supply of USDT with assets held in reserve. The end result is a cryptocurrency that offers the best of both worlds.

As a cryptocurrency, it’s digital, programmable and can easily be transferred anywhere in the world. But as a US dollar-backed asset, its value remains relatively stable compared to most cryptocurrencies, and its value is backed up by trust in the US dollar.

How does Tether work

New USDT enters the system when the Tether company mints it.

When someone wants USDT, they make a payment to Tether. The company then adds those funds to its reserves and mints new USDT for the customer.

USDT is removed from circulation in the same way. When someone wants to redeem USDT for USD, they can sell it back to the Tether company. Redeemed USDT is then destroyed and removed from circulation.

This process is typically only for bigger customers. The everyday Tether user will instead buy and sell USDT on a cryptocurrency exchange, the same as they would any other cryptocurrency.

Where to buy Tether

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CoinSmart Cryptocurrency Exchange		Credit card,Debit card,Interac e-Transfer,Bank Wire,Bank Draft	CAD	10 cryptocurrencies	Get a $20 bonus in BTC when you open an account and deposit at least CAD$100. T&Cs apply. Buy and sell cryptocurrency quickly and easily, with instant verification and 24/7 customer support, on this Canadian exchange.	Go to site View details	Compare	loading Fetching your data...
Crypto.com App		Bank transfer (ACH),PayPal,Bank transfer (SEPA),SWIFT,Xfers,Credit or Debit Card	USD, AUD, CAD, CHF, EUR, GBP, NZD, SGD, JPY, ZAR & 9+ more	66 cryptocurrencies	Buy 55+ cryptocurrencies at true cost, earn up to 8% p.a. on holdings, pay with your crypto for cashback at stores, get loans and more with this complete crypto-finance platform.	Go to site View details	Compare	loading Fetching your data...
NDAX Cryptocurrency Exchange		Cryptocurrency,Interac e-Transfer,Wire transfer,Bank Draft	CAD	10 cryptocurrencies	Get a $10 bonus when you open an account and deposit at least CAD$100. T&Cs apply. NDAX is a Canada-based digital asset exchange with CAD currency pairs and with options for advanced traders.	Go to site View details	Compare	loading Fetching your data...
Binance Cryptocurrency Exchange		Credit card,Cryptocurrency,Debit card,Osko,PayID	USD, AUD, GBP, CAD, EUR, CNY, RUB, TRY, NGN, UAH & 40+ more	268 cryptocurrencies	Trade an extensive range of reputable coins on this world-renowned exchange, popular for its high liquidity and multi-language support. US residents: As of September 2019, US-based users can only trade USD on the American dollar onramp of Binance, Binance.US. UK residents: In addition to normal crypto trading services, Binance offers margin lending. As this is a regulated activity which they are not authorised to offer in the UK, we advise you not to use this service. If you're interested in margin trading, see authorised providers.	Go to site View details	Compare	loading Fetching your data...
KuCoin Cryptocurrency Exchange		Credit card,Cryptocurrency,Debit card	USD, EUR, GBP, RUB, CNY, AUD, KRW, JPY, TRY, VND & 40+ more	210 cryptocurrencies	Browse a variety of coin offerings in one of the largest multi-cryptocurrency exchanges and pay in cryptocurrency.	Go to site View details	Compare	loading Fetching your data...
Kraken Cryptocurrency Exchange		Electronic Funds Transfer,Wire transfer,Osko,PayID,Ethana Custody	USD, EUR, GBP, JPY, CAD, CHF, AUD	47 cryptocurrencies	Buy, sell and trade a range of digital currencies on this high-liquidity exchange – suitable for beginners right through to advanced traders. UK residents: In addition to normal crypto trading, Kraken offers margin lending. As this is a regulated activity which they are not authorised to offer in the UK, we advise you not to use this service. If you're interested in margin trading, see authorised providers.	Go to site View details	Compare	loading Fetching your data...
Bitfinex Professional Trading Exchange		Cryptocurrency	USD, EUR, GBP, JPY	164 cryptocurrencies	Cryptocurrencies are a highly volatile investment product. Your capital is at risk. Spot trade all of the major cryptos on this full-featured exchange and margin trading platform.	Go to site View details	Compare	loading Fetching your data...
CoinSwitch Cryptocurrency Exchange		Credit card,Cryptocurrency	USD, JPY, RUB, EUR	387 cryptocurrencies	CoinSwitch allows you to compare and convert over 250 cryptocurrencies across all exchanges.	Go to site View details	Compare	loading Fetching your data...
CEX.IO Cryptocurrency Exchange		Bank transfer (ACH),Credit card,Bank transfer (SEPA), Faster Payments Service,Skrill	USD, EUR, GBP, RUB	22 cryptocurrencies	Disclaimer: Highly volatile investment product. Your capital is at risk. Use your USD, EUR or RUB to buy and sell cryptocurrency at competitive exchange rates and with high maximums for verified accounts.	Go to site View details	Compare	loading Fetching your data...
YoBit Cryptocurrency Exchange		AdvCash,Cryptocurrency,Payeer,Perfect Money,Capitalist	USD, RUB	1427 cryptocurrencies	Pay in USD, RUB or trade crypto to crypto at this Russian-based cryptocurrency exchange with hundreds of coins listed.	Go to site View details	Compare	loading Fetching your data...
Changelly Crypto-to-Crypto Exchange		Credit card,Debit card	USD, EUR, GBP, AUD, CAD, CHF, HKD, JPY, PHP, ZAR & 30+ more	146 cryptocurrencies	Access competitive crypto-to-crypto exchange rates for 150+ cryptocurrencies on this global exchange.	Go to site View details	Compare	loading Fetching your data...
Paxful P2P Cryptocurrency Marketplace		Bank transfer,Cash,Credit card,Cryptocurrency,Debit card	DZD, XCD, ARS, AMD, AWG, AUD, AZN, BSD, BHD, BDT & 140+ more	2 cryptocurrencies	Connect with bitcoin buyers and sellers through this peer-to-peer marketplace that accepts cash, credit and more than 300 other payment methods.	Go to site View details	Compare	loading Fetching your data...
Bibox Cryptocurrency Exchange		Cryptocurrency	EUR, GBP	111 cryptocurrencies	Trade crypto to crypto with a choice of over 100 currencies on this global exchange based in China.	Go to site View details	Compare	loading Fetching your data...
OKEx Cryptocurrency Exchange		Bank transfer,Cryptocurrency,WeChat	USD, CNY, EUR, ARS, AUD, BGN, BRL, CAD, CHF, COP & 20+ more	269 cryptocurrencies	Listing over 100 cryptocurrencies, OKEx offers its users a variety of payment methods and coins to choose from.	View details	Compare	loading Fetching your data...
Huobi Cryptocurrency Exchange		Cryptocurrency	GBP, USD, AUD, EUR, INR, BRL, KHR, CAD,CNY, NZD & 15+MORE	234 cryptocurrencies	Huobi is a digital currency exchange that allows its users to trade more than 190 cryptocurrency pairs.	View details	Compare	loading Fetching your data...
Bittrex Digital Currency Exchange		Cryptocurrency,Wire transfer	USD	278 cryptocurrencies	Buy from one of the largest cryptocurrency exchanges with a selection of over 190+ cryptocurrencies and 3 USD pairings.	View details	Compare	loading Fetching your data...
Bitit Cryptocurrency Marketplace		Cash,Credit card,Debit card,Neosurf,Bank transfer (SEPA)	EUR, USD, JPY, DKK, GBP, SEK, NOK, TRY & 5+ more	50 cryptocurrencies	Buy cryptocurrency with cash or credit card and get express delivery in as little as 10 minutes.	View details	Compare	loading Fetching your data...

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How to use Tether

On the technical level, the Tether coins are issued as tokens on three different blockchains. This means there are three different types of USDT in existence.

All of them are functionally the same, but when using USDT, you must be aware of which type you’re using. The easiest way of finding out which type you have is by looking at your Tether wallet address. Each type of address will begin with different letters or numbers, which tells you what type it is.

Is Tether safe?

Rumours and concerns are constantly swirling around Tether, and whether it’s safe is a matter of personal opinion.

Some people have expressed fears that Tether may not be fully backed, that it’s printing tokens out of thin air without any actual demand for USDT, that it’s a party to price manipulation of the Bitcoin markets and that, in the event of a bank run, USDT users may be left holding worthless, unredeemable tokens.

These rumours have periodically boiled over, and seen the value of Tether swing wildly by stablecoin standards. USDT is meant to be worth around $1, but at various points, it has been valued above $1.05 or below $0.95 as the markets gain and lose confidence in Tether.

It’s hard to separate fact from fiction as far as Tether is concerned, but the following points are widely accepted:

• Tether is not 100% backed, but it is at least 74% backed.
• The markets don’t mind that Tether isn’t fully backed, and traders still reliably value USDT Tether at around $1 each.

To decide for yourself whether Tether is safe, and how it can simultaneously be 74% backed, worth $1 each and trusted by the markets, you need to know the whole strange story.

Tether and Bitfinex: The whole story

There have been rumours swirling around Tether for years, with two of the most persistent being:

1. That it isn’t actually fully-backed, and it’s just printing money without having reserve assets.
2. That Tether is a party to price manipulation in the Bitcoin markets, and it’s artificially elevating Bitcoin prices by pushing unbacked USDT onto the market.

These rumours also envelop the Bitfinex cryptocurrency exchange because although they’re separate companies, Tether and Bitfinex are very closely related and share much of the same management.

Over the years, these rumours were fanned by the following suspicions and evidence:

• Tether abruptly terminated its relationship with an accounting firm hired to audit its reserves. No audit was ever completed, and Tether never gave a credible reason why its reserves could not be audited.
• Researchers found a striking correlation between the issuance of new USDT and Bitcoin price rises, suggesting foul play.

Things came to a head in 2019, when it was revealed that Tether was under investigation by the New York Office of the Attorney General and other organisations. When this investigation went public, it also revealed a lot of behind-the-scenes information about Tether.

This information contained both good news and bad news.

Disclosure: At the time of writing the author holds BTC and BNB.