What is USDT Tether ? Tether stands as a decentralized digital currency, its value tethered to USD, EUR, and various fiat currencies. Spearheading this initiative is Tether Limited, a Gibraltar-based company that not only introduced the Tether platform but also continues to drive its development. At the core of their mission is streamlining digital token transactions, accomplished through their stable coin, USDT, commonly referred to as tether. In the forthcoming discussion, we will delve into the pivotal question: does USDT genuinely find its backing in tangible U.S. Dollars?
Such systems can be used by large organizations and criminal networks to launder money, evade tax, and fabricate their own token. Such large organizations can mint their own digital currencies, like Tethers USDT and Binance coins BNB. The organizations claim these tokens are backed by actual US dollars, but there is no auditing of their accounts or storage of any such data. There is no way for an individual to verify that the organizations’ claims are real or spurious at present.
Why Tether Keeps Printing USDT to Pump And Dump?
It’s illegal to issue a cryptocurrency backed by the U.S. dollar. Tether only backs its USDT with institutional clients, and if they can’t prove that they are doing this, then it may not be as legitimate as it seems on the surface.
Think of USDT as a digital token, which is based on the Bitcoin blockchain and backed by real US dollars parked at its bank accounts. It means that you can exchange 1 USDT back to 1 USD with no problem. The supply of USDT is theoretically unlimited, because you can use it like an escrow service or a stablecoin which rarely loses its value.
To create more Tether, the company will buy up to $50,000 (the amount of USDT in circulation right now) in USD and deposit it into a bank. They then issue an equivalent amount of Tethers, which they can send out to anyone who wants to exchange their money for USDT that can be held as digital cash on a blockchain and has the stability of the dollar. This is one of the reasons why people believe Tethers may be used as a scaling solution.
Tether allows you to store, send and receive digital tokens pegged to dollars, euros and yen person-to-person, globally, instantly, and securely for a fraction of the cost of any alternative. Tether is the best way to store your money, especially when it’s hard to find a truly safe bank account.
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Why is USDT (Tether) always at $1?
There is supposedly supposed to be 1 teather for 1 USD held in reserve. It’s what’s know as a “stable coin.” it’s the digital equivalent of a dollar bill. So instead of selling Bitcoin for dollars, you sell it for teather which is the same as a dollar without having to actually withdraw the money to a bank account to get the dollar equivalent value.
The idea is that each Tether coin can be redeemed for USD1, where that USD1 is supposed to be held in a bank account or other liquid assets.
This gives the flexibility and anonymity of bitcoin without the same fluctuations in value or concerns on volatility.
Since Tether is redeemable for USD1, it makes no sense for Tether to be valued at anything but USD1.
But there is also alot of controversy around teather about if they really do have $1 in reserve for each teather issued. They won’t say, they claim they do, they had a fake audit which said they did, but a lot of people don’t agree.
