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Tether

What is Tether (USDT)?

Everything you need to know about Tether, the blockchain bridge between digital currencies and fiat.

Last updated:

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.

Learn more Buy Tether (USDT)

Tether and Bitfinex controversy

Tether is created by a company called Tether Limited, and is closely affiliated with the Bitfinex exchange.

There are currently over 2 billion USDT in circulation. The Tether company claims to have fiat currency reserves to back up all of the Tethers in circulation, but there is no concrete evidence of this.

Tether recently and unexpectedly discontinued its relationship with the auditors that were going to verify this claim, causing uncertainty about whether USDT is securely backed by US dollar reserves.

Even though the cryptocurrency is pegged at US$1, Tether users should note that this price stability is largely dependent on Tether Limited actually being able to support the amount of Tether currently in circulation, and that a loss of value is still possible.

  • There is no concrete evidence of Tether Limited being able to support the value of USDT currently in circulation.
  • There is no concrete evidence of Tether Limited not being able to support the value of USDT currently in circulation.
Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade.

What is Tether?

Icon Symbol Initial release date Algorithm type Max. supply
USDT, ₮ 2014 SHA-256 444,951,082 USDT

Tether Limited, the company behind Tether tokens, keeps traditional fiat currencies, including US dollars, euros and yen, in a reserve bank account. Using the infrastructure of the bitcoin blockchain, Tether promises to back its own digital tokens, called Tethers, with fiat currency.

If, for example, you put US$20 into your Tether wallet, you should have roughly 20 Tethers. Since Tether’s tokens are anchored, or “Tethered,” to real-world currencies, their value may be somewhat protected from the volatility of other cryptocurrencies. Some major features of Tether include:

  • Stability. Because Tethers are backed by a store of real-world currency, it claims that users can have the benefits of digital, blockchain-based transactions without being subject to the volatility of most cryptocurrencies.
  • Transparency. Tether claims that its fiat reserve account is regularly audited to verify that its reserve accounts can actually back up the value of Tethers in circulation. The balance is updated regularly and is publicly accessible at all times. Additionally, all Tether transactions are recorded on the public blockchain.
  • Minimal transaction fees. There are no transaction fees when sending money between two Tether accounts or any two blockchain-based wallets capable of storing Tether. However, converting Tethers back into fiat currency may require paying some service or transaction fees to the parent company.

How is Tether different from bitcoin?

Unlike bitcoin, Tether tokens are backed by reserves of fiat currency held by the company, Tether Limited. Bitcoin was designed largely to serve as an alternative to traditional currencies, operating on a peer-to-peer level outside of the scope of national borders and financial institutions. Tether, on the other hand, was designed specifically to integrate fiat currencies with the blockchain by converting physical cash into a digital asset.

Tether is issued on the bitcoin blockchain

Some developers choose to issue assets on the bitcoin blockchain. The Omni platform is an additional software layer that works on top of the core bitcoin code, making it possible to issue and trade digital assets on the bitcoin blockchain. Tether makes use of the Omni layer for deploying Tether tokens, meaning that Tether transactions are recorded on the bitcoin blockchain.

How to buy USDT

Tether tokens can be purchased on a number of popular cryptocurrency exchanges, including Bitfinex and Kraken. While the value of Tether tokens is pegged to the US dollar, some exchanges do not offer direct USD/USDT pairings, and you will need to use bitcoin or another cryptocurrency to trade for Tether.

Name Product Deposit methods Fiat Currencies Supported Cryptocurrencies
Kraken Cryptocurrency Exchange
Kraken Cryptocurrency Exchange
Electronic Funds Transfer
Bank transfer (SEPA)
Wire transfer
USD, EUR, GBP, JPY, CAD
BTC, ETH, XRP, BCH, EOS, LTC, ADA, XLM, DASH, XMR, USDT, ETC, QTUM, ZEC, REP, DOGE, GNO, MLN, ATOM, XTZ, SC
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
Binance Cryptocurrency Exchange
Binance Cryptocurrency Exchange
Cryptocurrency
-
BTC, XRP, USDT, ETH, NEB, XVG, TRX, NEBL, ETH, NEO, FUN, ETC, BCC, POE, DASH, ELF, & 80+ more
Trade an extensive range of reputable coins on this world-renowned exchange, popular for its high liquidity and multi-language support.

US residents: US-based users have been restricted from Binance since June 2019.
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
BC Bitcoin Cryptocurrency Broker
BC Bitcoin Cryptocurrency Broker
Cryptocurrency
Bank transfer (SEPA)
SWIFT
Wire transfer
Faster Payments Service
GBP, EUR, USD, CAD, SGD, AUD, JPY, MXN
BTC, ETH, BCH, XRP, LTC, EOS, XLM, USDT, ADA, XMR, TRX and 50+ more
BC Bitcoin is a UK-based cryptocurrency brokerage that buys and sells more than 100 different cryptocurrencies.
Go to site
View details
CoinSwitch Cryptocurrency Exchange
CoinSwitch Cryptocurrency Exchange
Credit card
Cryptocurrency
USD
BTC, BCH, MIOTA, XVG, NEO, ADA, XRP, TRX, ONT, ZIL, GAS, LTC, ZRX, QTUM, ETH, ETC, VET, ICX & 300+ more
CoinSwitch allows you to compare and convert over 250 cryptocurrencies across all exchanges.
Go to site
View details
Changelly Crypto-to-Crypto Exchange
Changelly Crypto-to-Crypto Exchange
Credit card
Debit card
USD, EUR
BTC, BCH, ETH, XMR, ZEC, DASH, XRP, ETC, LTC, DOGE, XLM,1ST, ADX, AMP, ANT, BAT, & 75+ more
Access competitive crypto-to-crypto exchange rates for more than 35 cryptocurrencies on this global exchange.
Go to site
View details
Bitfinex Professional Trading Exchange
Bitfinex Professional Trading Exchange
Cryptocurrency
Wire transfer
USD, EUR, GBP, JPY
BTC, BCH, BTG, IQ, TRX, GNT, AVT, DASH, DATA, EDO, EOS, ETC, ETH, LTC, MIOTA, NEO, OMG, QTUM, SAN, USDT, XMR, XRP, BAT, ZRX, FUN, MANA, SPANK, TNB, RLC, RCN, REP, ELF, AID, SNGLS, SNT, QASH, YOYO, MITH, ETP, XTZ, CNN, BOX, GOT, TKN, UTN
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.
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View details
Exmo Cryptocurrency Exchange
Exmo Cryptocurrency Exchange
Credit card
Cryptocurrency
Debit card
Payeer
Perfect Money
Bank transfer (SEPA)
Wire transfer
USD, EUR, RUB, PLN, UAH
BTC, BCH, ETH, ETC, XRP, KICK, DASH, WAVES, ZEC, XMR, LTC, DOGE, USDT, ADA, INK
A UK-based cryptocurrency platform that provides buyers with a wide variety of payment options.
View details
KuCoin Cryptocurrency Exchange
KuCoin Cryptocurrency Exchange
Cryptocurrency
-
BTC, BCH, XMR, DAG, ETH, XRP, EOS, LTC, ADA, TRX, NEO, ONT, STEEM, BTM, BCD, ZINC, VET, OLT, USDT, BSV, & 134+ more
Browse a variety of coin offerings in one of the largest multi-cryptocurrency exchanges and pay in cryptocurrency.
Go to site
View details
XBrick Cryptocurrency Exchange
XBrick Cryptocurrency Exchange
Cryptocurrency
-
BTC, USDT, ETH, EOS, AE, BTO, BTS, CAN, HLC, SEER, XAS
Recently launched in Australia in late 2017, XBrick now offers its services globally and users can download its mobile trading platform to buy and sell cryptocurrencies.
View details
BigONE Cryptocurrency Exchange
BigONE Cryptocurrency Exchange
Cryptocurrency
-
BTC, ETH, EOS, USDT, ADX, AE, AIT, ATN, ATT, BAT, BCDN, BIG, BTO, CANDY, CDT, CHAT, AT, CPS & over 60+ more
A crypto-to-crypto exchange listing over 100 pairings and low trading fees.
View details
Stellarport Exchange
Stellarport Exchange
Cryptocurrency
-
XLM, BTC, BCH, USDT, OMG, ZRX, KIN, MOBI & more
Stellarport taps into the Stellar Decentralised Exchange to provide buyers and sellers with access to XLM and various other cryptocurrencies.
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Can I make money with Tether?

Not really. Unlike most cryptocurrencies, whose values tend to fluctuate in relation to the market, Tether’s value is designed to reflect the value of the US dollar. By converting fiat currency into Tethers, you can participate in blockchain-based transactions without being subject to the volatility of other digital currencies. Since Tethers are created and issued by the company Tether, in correlation to their fiat reserves, mining is not applicable to Tether.[/fin_hide]

Things you should know

  • First and foremost, it is important to be aware that buried within Tether’s extensive “Terms of Service” agreement is this statement: “There is no contractual right or other right or legal claim against us to redeem or exchange your Tethers for money. We do not guarantee any right of redemption or exchange of Tethers by us for money. There is no guarantee against losses when you buy, trade, sell, or redeem Tethers.”
  • While the core concept behind Tether tokens is that they are backed 100% by fiat reserves, users may want to exercise caution given that the company does not guarantee redemption of Tethers and is not formally liable to do so.
  • Between July 2017 and August 2017, the supply of Tethers rapidly increased by over US$100,000,000. Given that Tether claims to be backed by fiat reserves, this led some to question where that funding came from.
Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

Image sources: Shutterstock

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