As the world's first stablecoin, Tether (USDT) was launched in 2014, aims to promote the use of fiat currency in a digital way. USDT is based on an asset token (Omnilayer protocol) on the Bitcoin Network and is issued according to the amount of fiat currency actually held by the bank. The market value of USDT is pegged at a ratio of 1:1 with the dollar. Users can send and receive tokens on the blockchain like using Bitcoin.

How does Tether (USDT) Work?

According to the White Paper of Tether (USDT), "each tether unit issued into circulation is backed in a one-to-one ratio (i.e. one Tether USDT is one US dollar) by the corresponding fiat currency unit held in deposit by Hong Kong based Tether Limited. In addition to pegged US dollar assets, cash equivalents, other assets or loan receivables provided by Tether to third parties can also be used as collateral.

The following is the process of issuing and burning USDT:

Issuing USDT:
When a customer remits US dollars to the bank account of the USDT issuer, Tether will transfer the same amount of US dollars to the customer's Tether wallet after receiving the funds.

Burning USDT:
When customers want to redeem US dollars, they need to transfer the USDT they hold to the core wallet of Tether Limited and pay the corresponding handling fee. Subsequently, Tether Limited will remit the same amount of US dollars to the customer's bank account and burn the corresponding amount of USDT.

When the total amount of USDT circulating in the market is less than or equal to the reserve value of Tether, Tether will use the reserve assets to redeem the issued USDT to ensure that USDTs can always be pegged with the US dollar. You can view the relevant values through the transparency page of the official website of Tether.

What is Tether (USDT) ?

Tether (USDT) is the most popular stablecoin at present. Because it is pegged with fiat currency, USDT can ensure the stability of its price. It provides a fast and low volatility solution for investors to withdraw from market positions.

By virtue of the characteristics of USDT pegging with fiat currency, investors can hold digital currencies similar to fiat currency in the crypto market, and then easily trade other digital currencies.

The following are the features of Tether (USDT):
· It is backed in a 1:1 ratio by the US dollar and stable relative to ordinary digital currencies

· It can be issued on different blockchains (including Algorand, Avalanche, simple ledger protocol (SLP) of Bitcoin Cash, Ethereum, EOS, Liquid Network, Omni, Polygon, Tezos, Tron, Solana and Statemine)

Tether (USDT) Crypto Wallet

In addition to placing USDT in the Gate.io exchange to facilitate trading, USDT can also be placed in the crypto wallet.

There are many choices of Tether (USDT) crypto wallet. You can choose a cold wallet or a hot wallet based on your needs.