How Tether USDT Token Works, Partnerships, And Its Expansion

Last updated on December 21st, 2023 at 08:53 pm

Advertisements

Tether is a fiat-collateralized stablecoin pegged 1:1 to the US Dollar (USD) that offers its users a hedge of transacting with blockchain-based assets with the sole aim of mitigating price risk.

Tether is powered by blockchain technology and primarily issued on the Ethereum and TRON blockchains with USD sitting in bank accounts.

Key Takeaways:

  • Tether Limited is owned by iFinex Inc., a Hong Kong-based company that also owns Bitfinex cryptocurrency exchange.
  • After the USDT launch in 2014, other fiat-pegged currencies launched by Tether are Tether Gold (XAU₮), Euro Tether (EURT), MXNT, and CNHT.
  • As of December 9, 2023, there were over 90 billion USDT tokens in circulation.
How Tether USDt Works
Photo credit: Mariia Shalabaieva

History of Tether (USDT)

When USDT was launched in July 2014 by Brock Pierce, Craig Sellars, and Reeve Collins, it was known as Realcoin.

Advertisements

Tether platform was primarily designed to facilitate the use of fiat currencies in a digital manner.

It is the pioneer blockchain-enabled platform that allows users to use fiat currencies in digital form, thereby boosting decentralization and cross-border transactions across the blockchain.

Its goals:

  • To disrupt the conventional financial system by using blockchain technology.
  • To enable its users or customers to perform transactions with fiat currencies on the blockchain.
  • By reducing the barest minimum, the devastating volatility and complexity associated with digital currency.

Who founded Tether?

The co-founders of Tether are Reeve Collins, Craig Sellars, and Brock Pierce. They are all leading voices in Blockchain, cryptocurrency, NFTs, and stablecoin.

Features That Make Tether Unique

One, what makes Tether unique is the fact that whenever Tether Network issues new USDT tokens, the same amount of US Dollars is allocated, thereby making it possible that USDT is fully backed by cash equivalents.

The “peg” feature reduces the volatility and minimizes losses in times of market volatility.

According to market analysts, cryptocurrencies, especially Bitcoin, can increase or decrease in price by 5% to 10% within 24 hours, this volatility makes cryptos unreliable as a store of value, this is where Tether USDT comes in: to protect holders from the fluctuations.

Whenever the cryptos are falling, Tether makes it possible for investors to convert their holdings to USDT, without having to completely cash out into USD, just to highly minimize their losses.

Two, Tether is unique because USDT provides a simple way to transact USD equivalent across the world among traders through the blockchain, without using centralized financial systems such as banks.

Is Tether Network Secured?

Tether USDT operates as a second-layer token built on top of other cryptocurrencies’ blockchains such as:

  • Bitcoin,
  • Tron,
  • Ethereum,
  • Solana,
  • Algorand,
  • OMG, and
  • EOS
  • Avalanche,
  • Liquid Network,
  • Omni,
  • Polygon,
  • Tezos,
  • Statemine,
  • Kava
  • Bitcoin Cash’s Simple Ledger Protocol (SLP),

These transport protocols consist of open-source software that interfaces with blockchains to allow for the issuance and redemption of Tether tokens.

This means that USDT  does not have its blockchain, rather it is secured by the other cryptocurrencies’ blockchain hashing algorithms.

Also Read:  What Makes Tether Scale Greater Heights?

Is USDT Accessible?

USDT is accessible globally such that its average daily trading volume often exceeds that of Bitcoin.

The Number of Tether USDt Coins In Circulation

Tether USDt Token is the third most capitalized cryptocurrency. And as of December 8, 2023, there were over 90.2 billion USDT tokens in circulation.

Each of the Tether tokens is 100% backed by Tether’s reserves. Tether also publishes a record of the current reserve assets as part of its transparency policy.

Tether’s Collaboration and Expansion

Collaboration with Keet

Tether partnered with Keet in July 2022 ahead of its plan to launch a chat app Ardoino.

Keet is a Peer-to-Peer Chat App, built with the Holepunch platform. Holepunch platform allows anyone to create Web3 apps that don’t use any servers.

Partnership with El Salvador’s Visa Programme

On Thursday, December 7, 2023, Tether and the government of El Salvador launched the “Adopting El Salvador Freedom Visa Program”.

The visa program is designed to enable 1,000 crypto investors every year to get El Salvador’s citizenship when they invest at least $1million worth of Tether USDT stablecoins or Bitcoin.

Expansion of Its fiat-pegged currencies

After the launch of USDT in 2014, Tether has launched other fiat-pegged currencies, they include:

  • Tether Gold (XAU₮): January 23, 2020
  • Mexico Peso Tether (MXN₮): May 26, 2022
  • Chinese Yuan Tethers (CNH₮): December 6, 2022
  • Euro Tether (EURT)

Following the increased interest and readiness by some companies in Mexico to adopt cryptocurrency, Tether launched a new stablecoin backed by the Mexican Peso – named MXNT.

MXNT marked the entry of Tether USDt into Latin America because Mexico is seen as “prime location” for the next Latin American crypto hub.

Interestingly, crypto usage by Mexicans have grown over the years. By the cryptocurrency adoption index, Mexico ranked 39 out of 146 countries in 2020; in 2022, it ranked 28, and by 2023, the Latin American country is ranked 16, according to Statista.com

What this means is that there is ever-growing interest in adopting crypto in the country, a 2021 report by Triple A attested to this,

The report of the crypto payments firm revealed that 40% of Mexican firms were interested in adopting crypto in one form or the other.

On Thursday, May 26, 2022, Tether officially entered the Latin American country with the launch of MXN₮ pegged to the Mexican Peso with blockchain support on Ethereum, Tron, and Polygon.

Controversies Over Tether Operations

USD Reserves:

Since its launch, there have been several concerns about the validity of Tether’s claims about its USD reserves.

At some points, controversy over USD reserves disrupted USDT’s price, which led to fall of USDt as low as $0.88 in 2018, lowest in its history (after its All-time Low of $0.5683 on March 2, 2015), which negated the value proposition of USDT.

In 2018, there were criticisms that Tether wasn’t really backed by equivalent real dollars, but the company continues to build more trust among its community.

Also Read:  Warren Buffett is Wrong About Bitcoin, Gold, Banks - Max Keiser

Auditing Concerns:

Some analysts have raised concerns that Tether’s reserves have never been fully audited by an independent third party.

Not Immune from Hack:

Despite its security features, Tether Treasury Wallet was hacked on November 19, 2021, leading to theft of $30,950,010 USDT, according to a circular published on its website.

As Tether is the issuer of the USDT managed asset, we will not redeem any of the stolen tokens, and we are in the process of attempting token recovery to prevent them from entering the broader ecosystem,” a statement from the company reads.

Using Tether’s Reserves for BitFinex:

There have been allegations that Tether Operations Limited allow funds from its reserves be used for BitFinex crypto exchange, a sister company owned by iFinex.

For instance, New York Attorney General Letitia James obtained a court order in April 2019 enjoining Tether and BitFinex parent iFinex from further violations of New York law after determining that BitFinex borrowed at least $700 million from Tether’s reserves to offset BitFinex corporate and client funds frozen and ultimately seized from its Panamanian banking partner Crypto Capital Corp. in a money-laundering probe.

Tether and BitFinex would agree in 2021 to settle the case by agreeing to pay a fine of $18.5 million.

It also discontinues trading with any New York state residents or entities. It also promised the New York Attorney General’s office that it would furnish it with information about its reserves for the next two years.

Fined for Questionable Claims:

In October 2021, the U.S. Commodity Futures Trading Commission (CFTC) announced that Tether agreed to pay a $41 million fine

In October 2021, Tether was fined by the U.S. Commodity Futures Trading Commission (CFTC) to the tune of $41 million “over claims that Tether stablecoin was fully backed by U.S. dollars.”

After explaining everything you need to know about Tether and its operations and its stablecoin backed by fiat currencies, where and how can you buy Tether USDt?

Where You Can Buy Tether USDT Token

There are many cryptocurrency exchanges and peer-to-peer platforms that allow you to buy Tether USDT.

Some of the popular exchanges to buy USDT are:

  • Binance
  • Coinbase Exchange
  • Kraken
  • DigiFinex
  • HitBTC
  • Kucoin
  • OKX
  • OKEx
  • Bitstamp
  • CoinTR Pro
  • Bybit
  • Huobi Global
  • Uniswap v2
  • MoonPay

Others include Quidax, Remitano, Changelly, Symlix, Guarda, and Pursa among other supporting exchange platforms, especially for Nigerians.

Best Exchange to buy USDT

But your best bet would be Binance, Coinbase Exchange, Kucoin, and Kraken because they make it possible because you can swap other cryptocurrencies with USDT.

For instance, you can buy Tether on the largest crypto exchange – Binance – with the following pairs:

  • BTC/USDT
  • SOL/USDT
  • DOGE/USDT
  • XRP/USDT
  • TIA/USDT
  • LINK/USDT etc

Similarly, numerous pairs are available on Kucoin if you want to trade USDT such as XCAD/USDT, TRX/USDT, EDU/USDT, WLD/USDT etc.

5 Easy Steps To Buy Tether USDT Token

Whichever global exchange you choose to trade USDT, it takes you just five steps.

Buying USDT on KuCoin:

  • You need to create a Kucoin account with the following details: your email address, mobile phone number and country of residence
  • Secure your account by setting up Google 2FA code, anti-phishing code, and trading password.
  • Then you will have to verify your identity. You will need to enter your personal information and upload a valid Photo ID.
  • Add your credit/debit card details or your bank account after verifying your KuCoin account.
  • Then proceed to buy USDT with your KuCoin account.
Also Read:  Bitcoin Price Crosses $50,000 for First Time In 3 Months

Buying USDT on Binance:

  • Set Up a Binance account and verify your identification. You only need your email and mobile number.
  • There are several available options to buy Tether USDT on, they include: Credit/Debit Card, bank deposit, P2P trading, and via third party payment.
  • Choose one of the buying options and click on the “Buy Crypto”
  • Check the pairs you can buy USDT with, your country might play a role in the available pairs.
  • Check the payment details and fees in not more than 60 seconds, anything above 60 seconds will lead to recalculation of your order based on the current market price.
  • Then click on buy to complete the process.
  • Store or use your Tether USDt in Binance.

Buying on Coinbase

  • You need a valid ID and a proof of address in order to trade on Coinbase
  • Connect your account with a payment method: bank account, debit card or initiate a wire.
  • Click on “Buy & Sell”, select the buy panel
  • Choose Tether
  • Open the purchase screen
  • Enter the amount you want to spend in your local currency.
  • The app will automatically convert the local currency into a Tether amount. You can switch the number to the equivalent amount of Tether
  • Click the “Preview buy” option to see the details of your purchase
  • Complete the process by clicking “Buy now”
  • Confirm your purchase and that’s it.

Buying USDT on Kraken:

  • Sign up for a Kraken account with your email address and country of residence
  • Choose a preferred payment method
  • Connect your account with a payment method
  • Initiate a purchase with just $10

On Guarda:

If you’re buying from Nigeria, you can use Guarda App

  • Login to your Guarda account either on the web
  • Create Tether wallet
  • Open the Buy & Sell tab
  • Choose the currency you want to buy and enter the amount
  • Complete the transaction.

Size of Tether Community

Tether Operations Limited is estimated to have over 190 employees around the world and has more than 20 job vacancies to onboard more employees.

Its official Twitter account @Tether_to has over 389,000 followers; on Telegram @OfficialTether has over 8.4K subscribers, on Reddit, it has over 11,000 members, while it has 9,680 and over 18K followers Instagram @tether and Facebook @tether.to respectively.

Its community will continue to grow as it continues to expand around the world, especially with its recent collaboration with the government El Salvador.

Author

  • Opeyemi Quadri

    Ope is a finance writer and researcher with 10+ years of experience in content creation. His interests cut across decentralized finance, investment, foreign exchange, government policies and politics.

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Scroll to Top