What is Tether (USDT)?

Tether, or USDT, is the largest stablecoin. It is a token designed to be worth one US dollar, issued by a company that says it holds reserves to match every token. About $184 billion of it was in circulation in October 2026.

Where it came from

The project was announced in July 2014 under the name Realcoin. The first tokens were issued on 6 October 2014, and it was renamed Tether that November. It is closely linked to the exchange Bitfinex, and regulators have acted against the two together. In January 2025 Tether moved its headquarters to El Salvador.

How it works

Tether issues new tokens only when customers who have passed its identity checks buy them. It says each token is "backed 100% by Tether's reserves" and pegged one-to-one to the dollar.

USDT is not tied to one blockchain. It is issued on many, including Ethereum, Tron and Solana. These are separate versions of the token, and Lesson 33 explains why sending one over the wrong network can lose it.

Most holders cannot redeem tokens with the issuer directly. They buy and sell USDT on exchanges at the market price.

What backs it

Tether publishes a reserves report each quarter. For 31 March 2026 it reported:

• Total assets of about $191.8 billion against liabilities of about $183.5 billion
• About $141 billion in US Treasury bills, held directly and indirectly
• About $20 billion in gold and about $7 billion in bitcoin

The report is an attestation by the accounting firm BDO. An attestation is a snapshot on one date, and it is not a full audit. Tether said in May 2026 that an audit process had formally started.

What people use it for

Traders use USDT to move between crypto and something dollar-like without using a bank. People also use it to send money abroad and to hold dollars where local currencies are weak. Lesson 10 covers stablecoins in general.

Risks to know

• You rely on the reserves. In October 2021 the US regulator CFTC fined Tether $41 million. It found that Tether held enough reserves in its accounts to back its tokens on only 27.6% of the days in a 26-month sample from 2016 to 2018, while claiming to be fully backed.
• No full audit yet. The quarterly reports are attestations.
• Tokens can be frozen. Tether can freeze USDT at any address. In November 2023 it froze $225 million linked to a scam network.
• It is not a bank account. There is no deposit insurance.
• Rules are changing. The US GENIUS Act, signed in July 2025, sets reserve rules for payment stablecoins. Tether launched a separate US-based token, USAT, in September 2025.

Learn more

Lesson 10 explains how stablecoins hold their price and how two of them failed. Lesson 33 covers networks, and Lesson 9 explains why you need the network's own coin to move a token.