3 minsPublished on 3/28/2021

What is USDT?

Learn all about Tether (USDT), the market's oldest and most widely used stablecoin, created and issued by Tether Limited.

By Jonnie Emsley

Tether (USDT) is a cryptocurrency that aims to maintain a 1:1 exchange rate with the US dollar, created and first issued in 2014.

As of 2021, USDT is the world’s most widely used stablecoin, a type of cryptocurrency token that holds a fixed price against fiat currency.

What problems does USDT solve?

At the time USDT was launched, Bitcoin and other early cryptocurrencies could only be exchanged for other cryptocurrencies or fiat currency — there was no standardized way for crypto holders to trade against or move into fiat without altogether exiting the crypto ecosystem.

USDT was created in a bid to bridge this gap, giving users seamless access to a platform-agnostic, blockchain-based dollar that held many of the technical advantages of Bitcoin, Ether, and other crypto assets, without having their volatility.

Benefits and advantages of Tether.
Benefits and advantages of Tether.

USDT introduced the concept of stability to an asset-class that has historically fluctuated broadly against fiat currencies, enabling traders to quickly move into a more “stable” asset, fund USD-denominated margin accounts, and quickly complete transactions between exchanges.

In creating USDT, Tether also solved one of crypto’s most elemental challenges — that the volatility of cryptocurrencies restricted their real-life utility in a fiat-denominated world. Instead, USDT gave anyone a permissionless way to send crypto-dollars to anyone with speed, transparency, and low cost, opening up the use case of cryptocurrencies to remittance transactions, payments, and more.

How does USDT (Tether) work?

While USDT was originally issued on top of the Bitcoin network via the Omni Layer, it is now traded on a total of seven blockchain protocols including Ethereum, Tron, EOS, Algorand, Liquid Network, and Bitcoin Cash, in addition to Bitcoin.

The company behind USDT, Tether Limited, mints and removes the stablecoin from circulation according to their dollar reserves — Tether claims to maintain a 1:1 reserve ratio of USDT to USD held in their bank account. This allows USDT to trade at the same value as the US dollar.

A graph breakdown of Tether's reserves
A breakdown of Tether's reserves

In addition to providing US dollar exposure via USDT, Tether also supports the Chinese Yuan (CNHT), the (EURT), and ounces of gold (XAUT).

Who created Tether?

USDT is issued by Tether Limited, a Hong Kong-based company founded in 2014 by early cryptocurrency proponents Brock Pierce, Reeve Collins, and Craig Sellars. Tether Limited recently settled a years-long legal dispute with the New York Attorney General, which alleged the USDT creator had historically misrepresented the amount of US dollars it held in cash reserves.

What can USDT be used for?

As the crypto market's most popular cross-pair, USDT can be used on exchanges to buy or trade against hundreds of cryptocurrencies including Bitcoin, Ether, and Litecoin.

For individuals, USDT allows anyone to transact in fiat currency in a cheap, fast, and peer-to-peer way, or earn interest on US dollars via decentralized finance protocols.

USDT also gives merchants a way to accept cryptocurrency payments denominated in fiat, without the need for taking on market risk associated with accepting payments in Bitcoin or other cryptocurrencies.

How can you buy USDT?

To buy Tether (USDT) just visit our website or one of our partner wallet applications, select USDT from the drop-down menu, and follow the steps to complete your order.

If you get stuck, check out our handy guide on how to complete an order with MoonPay.

Jonnie Emsley
Written byJonnie Emsley