Tether (USDT) is a stablecoin that was created in 2014 by Brock Pierce, Reeve Collins, and Craig Sellars. The purpose of USDT Tether is to provide a cryptocurrency that is backed by a stable asset, in this case, the US dollar. The idea is that the value of USDT Tether will remain constant at $1, making it a more reliable medium of exchange and store of value.
USDT Tether was created by the company Tether Limited, which is based in Hong Kong. The company claims that every USDT Tether is backed by a corresponding US dollar held in reserve. This means that for every USDT Tether in circulation, there should be an equal amount of US dollars held in reserve by Tether Limited.
The idea of backing a cryptocurrency with a stable asset is not new. In fact, other stablecoins such as USD Coin (USDC) and TrueUSD (TUSD) have also been created with similar aims. However, USDT Tether has been the most successful stablecoin to date, with a market capitalization of over $60 billion as of May 2023.
Despite its popularity, USDT Tether has been the subject of controversy and scrutiny over the years. One of the main criticisms is that Tether Limited has never provided a full audit of its reserves. This has led some to question whether the company actually has enough US dollars to back every USDT Tether in circulation. In response to these criticisms, Tether Limited has provided partial audits and has claimed that it has always had enough reserves to back every USDT Tether.
Another controversy surrounding USDT Tether is its alleged involvement in market manipulation. In 2018, researchers at the University of Texas published a paper claiming that Tether Limited had used USDT Tether to manipulate the price of Bitcoin during the 2017 bull run. Tether Limited has denied these allegations and has claimed that USDT Tether is used for legitimate purposes.
Despite these controversies, USDT Tether remains one of the most widely used cryptocurrencies in the world. It is used by traders and investors as a way to move funds between different exchanges without having to use fiat currency. It is also used as a way to hold cryptocurrency in a stable asset during times of market volatility.