Where did Tether come from?

Tether (USDT) was born in 2014 to provide a stable cryptocurrency trading tool to avoid market fluctuations. Tether issues USDT by holding assets of equal value (such as cash or government bonds) to ensure that it maintains a 1:1 anchor with the US dollar. As a stable currency, USDT provides stability, value storage, and risk hedging functions for cryptocurrency transactions.

The Origin of Tether

Tether (USDT) is a stablecoin pegged to the U.S. dollar. Issued by Tether Corporation.

Background of birth:

Tether was born in 2014, when the Bitcoin and other cryptocurrency markets were highly volatile. In order to provide a stable trading tool, the Tether company created USDT, allowing traders to hold or trade funds between cryptocurrencies while avoiding price fluctuations.

Technical principle of issuance:

Every time Tether issues a USDT, it will hold an asset of equivalent value of US$1 in the reserve to ensure that USDT is consistent with the US dollar. Maintain a 1:1 anchor. These assets can be cash, Treasury bonds or commercial paper, etc.

Issuance process:

The issuance process of Tether currency requires the following steps:

1. The user submits a USDT purchase request to Tether.
2. Tether holds assets of equal value in reserves.
3. Tether Company issues the amount of USDT matching the purchase request to the wallet address specified by the user.

Function and features:

As a stable currency, Tether plays an important role in the cryptocurrency market:

• Stable Anchoring: USDT is pegged to the U.S. dollar, providing stability for cryptocurrency trading.
• Storage of Value: USDT can serve as a long-term store of value because its value relative to the U.S. dollar is relatively stable.
• Medium of Transaction: USDT is widely used as a medium for cryptocurrency trading because it eliminates the risk of price fluctuations.
• Hedging Risk: USDT can help traders hedge risks in the cryptocurrency market because its value fluctuates less compared to the U.S. dollar.

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