Tether (USDT)

Tether (USDT) is a stablecoin designed to hold a value of one US dollar per token, issued by the company Tether. It is the largest stablecoin by market capitalization and by trading volume, and it is the dominant dollar instrument on many crypto exchanges, in P2P trading and in emerging-market corridors where access to bank dollars is limited. A USDT token is a claim on its issuer, not on a bank or a central bank, and it carries no deposit insurance.

For a profile of the token's technical and market details, see the USDT (Tether) crypto profile.

The project launched in 2014 under the name Realcoin and was renamed Tether later that year. It was initially issued on a layer built on the Bitcoin blockchain and later expanded to many networks, including Ethereum and Tron, where most USDT now circulates. Tether shares management and ownership links with the crypto exchange Bitfinex, a connection that featured in later investigations.

For years Tether faced questions about whether every token was fully backed. In 2021 it settled with the New York Attorney General, paying $18.5 million and agreeing to publish reserve reports, after the office found that Tether had misrepresented its backing at times. Later that year the US Commodity Futures Trading Commission fined Tether $41 million over statements that its tokens were fully backed by dollars. Since then Tether has published regular attestation reports on its reserves prepared by an accounting firm, though not full audits. In 2025 the company announced the relocation of its headquarters to El Salvador.

Approved customers, usually institutions, send dollars to Tether and receive newly issued USDT; they can redeem USDT for dollars, subject to minimums, fees and verification. Most users never deal with Tether directly but buy and sell USDT on exchanges, through an OTC desk or from other users. Arbitrage between the secondary market price and the primary redemption value is what keeps USDT close to $1.

Tether reports that its reserves consist mainly of US Treasury bills and similar short-term instruments, together with reverse repurchase agreements, money market funds, and smaller holdings of gold, bitcoin and secured loans. The interest earned on reserves is retained by Tether rather than paid to holders, which has made the company highly profitable when rates are high.

• Trading: USDT is a common quote currency on centralized exchanges and is used as collateral, including for perpetual futures.
• Dollar savings: in countries with high inflation or capital controls, individuals and businesses hold USDT as a form of digital dollarization.
• Cross-border transfers: USDT on Tron is widely used for remittances and business payments, either through a stablecoin-settled payment or as the funding leg of a stablecoin-funded payment.

Tether is not a bank and, as of 2025, USDT had not been authorized as an e-money token under the EU's MiCA, which led many exchanges to restrict it for European users. Tether can freeze USDT held at specific addresses and has done so at the request of law enforcement, including for addresses linked to sanctioned parties on the SDN list. Its popularity in informal and high-risk corridors has drawn attention from regulators and investigators, and firms handling USDT use blockchain analytics to screen transfers.

• Issuer risk: holders depend on Tether's solvency, reserve quality and willingness to redeem.
• Peg risk: USDT has briefly traded below $1 during periods of stress, an event described as depegging.
• Transparency: attestations confirm reserves at a point in time but are narrower than a full audit.
• Freezing and regulatory risk: tokens can be frozen, and changes in law can limit where USDT may be offered.

Its main competitor, USDC, issued by Circle, has emphasized regulatory licensing and reserve disclosure in the United States and Europe.

• Tether (official website)