Glossary · U
USDT (Tether)
The largest stablecoin by market capitalisation, issued by Tether Limited. USDT is pegged 1:1 to the US dollar and backed by a mix of cash, Treasury bills, commercial paper, and other assets. USDT is widely used on centralised exchanges and DeFi protocols, though its reserve transparency has historically faced scrutiny.
Last updated
How USDT works in practice
USDT is the largest stablecoin by supply and the dominant settlement asset on centralised exchanges. It is fiat-backed in structure, and its reserve composition has historically been less granularly disclosed than some competitors'.
Worked example
Most exchange trading pairs quote against USDT rather than dollars, so its liquidity is deepest where trading actually happens — which is why it persists despite recurring questions about disclosure.
Figures are illustrative and chosen to be checkable, not live market data.
The mistake that costs people money
Size is not the same as safety. Reserve transparency, redemption access for ordinary holders, and issuer jurisdiction are all worth understanding before treating any stablecoin as equivalent to a bank deposit.
USDT: common questions
- What is USDT?
- The largest stablecoin by market capitalisation, issued by Tether Limited. USDT is pegged 1:1 to the US dollar and backed by a mix of cash, Treasury bills, commercial paper, and other assets. USDT is widely used on centralised exchanges and DeFi protocols, though its reserve transparency has historically faced scrutiny.
- How does USDT work in practice?
- USDT is the largest stablecoin by supply and the dominant settlement asset on centralised exchanges. It is fiat-backed in structure, and its reserve composition has historically been less granularly disclosed than some competitors'.
- Can you give an example of USDT?
- Most exchange trading pairs quote against USDT rather than dollars, so its liquidity is deepest where trading actually happens — which is why it persists despite recurring questions about disclosure.
- What do people get wrong about USDT?
- Size is not the same as safety. Reserve transparency, redemption access for ordinary holders, and issuer jurisdiction are all worth understanding before treating any stablecoin as equivalent to a bank deposit.