What is Cryptocurrency Tether USD?

 

Tether USD (USDT for short). Tether Company, which issued USDT, formerly known as Realcoin, is registered in Isle of Man and Hong Kong. In 2014, Realcoin changed its name to Tether. In 2015, tether was launched on the Bitfinex and Poloniex trading platforms, and then launched on more major trading platforms. The company said: “Tethers, a digital currency linked to the legal currency, all tethers are first issued as tokens on the Bitcoin blockchain via the Omni Layer protocol. Each issued tether is pegged to the U.S. dollar, and the corresponding U.S. dollars are stored in Hong Kong Tether Co., Ltd.

You can also read: Be careful with Tether

 

Stable coin

Tether is a cryptocurrency that is classified as a Stable Coin. Stable coins are cryptocurrencies that are pegged and backed by something traditional that has value. In Tether’s case, it is backed by the US dollar. 1 Tether should always equal 1 US dollar, and according to the creators of cryptocurrency Tether, all of the Tether in circulation is 100% backed by the US dollar that is kept in a reserve.

The idea behind cryptocurrency Tether USD is that it can be used like digital dollars, possessing the benefits of cryptocurrencies, while not being susceptible to the extreme volatility seen with other coins.

But in my opinion the statement that all Tether is backed by USD is highly questionable and is the main concern of the crypto community. If it comes out that Tether is not 100% “backed”, as they have stated, then the whole crypto market could experience a drastic drop, as Tether has become highly used and holds an important position in the marketplace. When trust in the currency drops, it also affects the whole market.

 

Features of Cryptocurrency Tether USD

In our foreign exchange reserves, traditional currency always supports every currency at the price of 1:1. 1 USTD=1 USD.

According to Tether’s CTO and co-founder Craig Sellars, users can wire transfer U.S. dollars to Tether’s bank account through SWIFT, or exchange for USDT through exchanges. Tether’s website states that it will strictly comply with the 1:1 guarantee, which means that the bank account will have a $1 capital guarantee for each USDT token issued. Users can search for funds on the Tether platform to ensure transparency. USDT is equivalent to the same amount of USD, 1 USDT = 1 USD, making it a good hedger in a turbulent cryptocurrency market.

 

Functions of USDT

Avoid the risk of overall decline

In currency exchange transactions, there are 3 common situations. Take the BNB/BTC transaction as an example, after buying BTC with BNB, you enjoy two benefits if both of them are up; But if one of them goes up, and the other one falls, your profits depend on how much the two currencies rise and fall. As for USDT, when the currency price falls, we can immediately switch the currency to USDT to ensure that your assets do not shrink.

Digital currency withdrawal

If you are very profitable and you want to withdraw cash, you can first convert the currency in your hand to USDT and then convert it to U.S. dollars through Tether or other platforms.

 

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