What is USD Tether coin?

What is USD Tether coin?

Cryptocurrencies have been in the news for a while now. Therefore, there’s a good chance you might have heard about stablecoins like Tether.

The universe of cryptocurrencies and digital coins is indeed quite diverse, to say the least. There are different things out in the market to solve various challenges; considering how young the need for digital currencies is, the chances are high that new things will continue to come in the years ahead.

What are stablecoins?

One of the biggest challenges cryptocurrencies face is their volatility. Practically no one wants to do business through an asset whose price does not remain the same even within a single minute. You can buy goods of a specific price only to learn that the costs of those goods have declined the next day – sometimes substantially.

In order to overcome this, digital currencies that are pegged with a tangible asset such as the US dollar, the Euro, or gold have been introduced and are adopted worldwide as a form of digital money. Stablecoins are designed by keeping the volatility of Bitcoin and other cryptocurrencies alike in mind. Their association with a real-life asset helps them to maintain a stable value. In comparison, algorithmic stablecoins like TerraUSD have proven unstable over time.

While stability is a significant feature for stablecoins, they are also safe since the stablecoin can freeze the funds which are stolen in a heist. The $600 million heists of PolyNetwork are a great example where Tether simply froze those funds, and those tokens had no value for the hacker.

What is USD Tether?

USD Tether is a stablecoin that is tied to the US dollar. This means that the value of USD Tether will remain almost the same as that of the US dollar. Thus this is why it is being used by people worldwide as there is a strong trust in the US dollar already. The USD Tether is designed to tie to the US dollar at a ratio of 1:1.

This allows USD Tether to remain stable. Furthermore, the coin also offers the following features becoming more attractive to the users:

1 – Backed by US dollars

Every token of USD Tether is advertised as being tied and backed with US dollar reserves, which primarily includes the traditional currency and its equivalent cash. However, New York Attorney General Letitia James’ office says that “Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie.”

2 – Transparency

In order to remain transparent, the value of USD Tether is published daily. This value matches with the existing tethers present within the circulation.

3 – Using Blockchain technology

USD Tether is built over the top-notch blockchain technology, an open-source ledger-based tech that helps to remain as safe and transparent on the internet as possible. It helps to make sure Tether delivers world-class security to its users.

4 – Stable currency

Tether converts the cash present into digital currencies, which further helps anchor the value with the price of the US dollar.

As a result of all these features, Tether is one of the most widely integrated digital to fiat cryptocurrencies that are in circulation today. The majority of the significant exchanges and service providers have Tether in their wallets, allowing customers to send and receive transactions on USD Tether.

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