Tether

Tether (USDT) is the largest stablecoin by market capitalisation. A stablecoin is a digital token designed to maintain a stable value, typically pegged to a fiat currency. Tether is pegged to the US dollar at a ratio of one to one: one USDT is intended to be redeemable for one US dollar. Tether is issued by Tether Limited, a company incorporated in the British Virgin Islands, which holds reserves it claims are sufficient to back the outstanding supply of USDT. It is widely used on cryptocurrency exchanges as a trading pair and as a way to move value between platforms without converting to a traditional bank account.

Because Tether is centrally issued by a private company, it carries counterparty risk that Bitcoin does not. The value of USDT depends on the solvency, reserves, and continued operation of Tether Limited. If the issuer were to become insolvent or face significant regulatory action, the peg could be at risk. Tether is not a replacement for Bitcoin: the two serve different purposes. Bitcoin is a decentralised, fixed-supply asset with no issuer; Tether is a centralised dollar-denominated token designed for price stability rather than scarcity. Understanding this distinction is important for anyone working with both assets.