Tether (USDT) is a cryptocurrency with reference to fiat currencies that is issued by Tether Limited Company. Using the technology of blockchain, Tether coin allows the users to keep, send and receive digital tokens pegged to dollars, euros, and yens.
Tether coin uses blockchain via the Omni Layer protocol. The Omni Layer protocol is the software with an open source code that interacts with blockchain, ensuring the release and redemption of crypto currency token on the basis of Bitcoin. Tether currencies are 100% supported by the actual currency actives on a reserve account of the Tether platform. The crypto currency can be bought or exchanged for fiat currencies in accordance with the service terms of Tether Limited.
In summer 2017, the plans about issuing USDT tokens on the blockchain of Litecoin were announced.
At the moment, Tether coin is working with US dollars and euros; in the nearest future, it is planned to add operations with Japanese yens. Tethers pegged to these currencies are marked as USDT, EURT, and JPYT correspondingly. The financial support of the cryptocurrencies is carried out by a bank trust that is working in Taiwan.
The ratio of the volume of Tether issued coins and the financial support can be seen on the platform’s website in the real-time mode. Despite the stated parity of USDT and USD, in the middle of October 2017, the cryptocurrency is traded for a little under one dollar.
The Tether (USDT) cryptocurrency is presented on a range of exchanges including Poloniex, Bitfinex, Kraken, and presents a virtual analog of the US dollar. In September 2017, the Ethfinex exchange announced the support of USDT.
Tether (USDT) cryptocurrency can be stored using any crypto wallet, which supports Omni Layer technology, it can be Holy Transaction, Omni Wallet and etc. There is also an official Tether Wallet, it is a software developed to store USDT tokens on Android and iOS platforms.
Криптовалюту Tether (USDT) можно хранить и отправлять при помощи любого кошелька, который поддерживает технологию Omni Layer, это могут быть Holy Transaction, Omni Wallet и др. В распоряжении пользователей есть и официальный кошелек «Tether Wallet» – программное обеспечение, которое было разработано для хранения USDT на Android и iOS.
The BitcoinWiki suggests you a relevant price of USDT coin and its market capitalization:
Theoretically, USDT can be exchanged for dollars at any moment at the Tether platform itself. However, in the platform’s rules it is stated that Tether is not money and not financial tools and Tether Limited is not obliged to carry out the exchange of its tokens for fiat currencies as well as it doesn’t guarantee such exchange and protection from losses when buying, selling or buying out of Tethers.
Some experts think that in this way the company ensures from possible regulatory restrictions in various jurisdictions. However, in the same way, the cryptocurrency may actually lose real support because it won’t be managed to actualize the right of its exchange.
Tether coin holds itself as a crypto platform that is obliged to act in a safe and transparent way, following all requirements and rules at that. This is why Tether doesn’t work in those countries and some states of the USA that do not regulate virtual currencies.
Among the countries with limited functioning of cryptocurrencies are Afghanistan, Bosnia and Herzegovina, North Korea, Ethiopia, Iran, Iraq, Laos, Syria, Uganda, Vanuatu, and Yemen. The use of cryptocurrencies is also limited in New York and Washington.
Most of the Tether troubles come from the lack of public audit. The market uncertainty towards the coin's stability and reliability regularly damages its capitalization and public image.
Most of the USDT controversies are linked to its price drops. Despite being "tethered" to USD, USDT sometimes loses a part of its price per coin. The biggest price drop happened on April 25, 2017, when the price almost got to 0.9 US dollars per coin. This fall happened after the news of the international wires in Tether being rejected by the Taiwanese banks. As a result. traders sold USDT coins, making the price of USDT much lower. Some of the cryptocurrency exchanges (particularly those that implemented Tether as a USD alternative) experienced a rapid Bitcoin price uptrend. The same happened with other cryptocurrencies, traded in pairs with Tether. The price correction technique of Tether is not stable enough to fix the price of USDT in a minute or hour time frame.
Another significant price drop of Tether happened on the 16th of October 2018. Some unknown organization (or individual) performed a significant sell of USDT. During the subsequent Tether price fall, other cryptos got a large short-term increase in price, providing well-informed investors with a suitable opportunity to gain speculative profit.
Bitfinex's misuse of Tether
The Letitia James' New York Attorney General's office requested and was quick to obtain a court order to request iFinex Inc. (Bitfinex operator) to cease operations in New York. Allegedly, Bitfinex transferred over 850$ million in co-mingled client and corporate funds to a Panama-based company called Crypto Capital Corp. According to the Attorney General’s office, Bitfinex accessed the Tether’s treasury and mismanaged 900$ million of the stablecoin’s cash reserves to “hide” the mentioned 850$ million loss. Due to the fact of Tether not being regularly audited, it is not possible to tell confidently if the coin was actually used as a reserve for hiding Bitfinex's mistakes. At the time of writing, the situation is still unclear but the market shows a notable downtrend seemingly connected to the situation.
See Also on BitcoinWiki
- Tether (USDT) website
- Tether.to Facebook
- Tether on Reddit
- Tether price and market state on Coin360