What is Tether (USDT)?

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

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 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. 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.

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 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. Because 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
Cash, BPAY, POLi, Cryptocurrency
AUD
BTC, BCH, ETH, XRP, ADA, XEM, LTC, XLM, TRX, DASH, NEO, XMR, EOS, QTUM, BTG, LSK, ETC, XVG & over 100+ more
CoinSpot is an Australian-based marketplace that allows you to easily buy, sell or trade more than 100 cryptocurrencies.
Cryptocurrency
BTC, XRP, USDT, ETH, NEB, XVG, TRX, NEBL, ETH, NEO, FUN, ETC, BCC, POE, DASH, ELF, ICX, BNB, ZRX, APPC & 80+ more
Trade an extensive range of reputable coins on this world-renowned exchange, popular for its high liquidity and multi-language support.
Cryptocurrency, Wire Transfer
New account holders must now deposit fiat/crypto equivalent to US$10,000 to trade.
USD, EUR
BTC, BCH, BTG, IQ, TRX, GNT, AVT, DASH, DATA, EDO, EOS, ETC, ETH, ETP, 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
Spot trade all of the major cryptos on this full-featured exchange and margin trading platform.
Credit card, Debit card
USD, EUR
BTC, BCH, ETH, XMR, ZEC, DASH, XRP, ETC, LTC, DOGE, XLM,1ST, ADX, AMP, ANT, BAT, BCN, BNT, BTG, CFI, CVC & 70+ more
Access competitive crypto-to-crypto exchange rates for more than 35 cryptocurrencies on this global exchange.
Kraken Cryptocurrency Exchange
Electronic Funds Transfer, SEPA, Wire Transfer *payment methods vary per country
USD, EUR, GBP, JPY, CAD
BTC, BCH, ETH, ETC, XMR, DASH, LTC, XRP, XLM, REP, ICN, MLN, ZEC, USDT, GNO, EOS
Exchange multiple cryptocurrencies through a range of payment methods, including Electronic Funds Transfer, SEPA or Wire Transfer.
Exmo Cryptocurrency Exchange
Credit card, Debit card, Cryptocurrency, Perfect Money, SEPA, Wire Transfer, Payza, CryptoCapital, Money Polo, Payeer, Giropay, Yandex Money & more
USD, EUR, RUB, PLN, UAH
BTC, BCH, ETH, ETC, XRP, KICK, DASH, WAVES, ZEC, XMR, LTC, DOGE, USDT
A UK-based cryptocurrency platform that provides buyers with a wide variety of payment options.
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.
BigONE Cryptocurrency Exchange
Cryptocurrency
-
BTC, ETH, EOS, OMG, USDT, ADX, AE, AIT, ATN, ATT, BAT, BCDN, BIG, BTM, BTO, CANDY, CDT, CHAT, AT, CPS & over 60+ more
A crypto-to-crypto exchange listing over 100 pairings and low trading fees.

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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.

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