Tether (USDT)

What is Tether (USDT) and who issues it?

Tether, ticker USDT, is a stablecoin: a token designed to track the US dollar one-for-one. Tether says it was founded in 2014, the year USDT launched.^[3] USDT has no open network of miners or validators behind it. A single company issues every token and is the only party that redeems tokens for dollars.

According to Tether's terms of service, the issuer is Tether International, S.A. de C.V. The company redomiciled from the British Virgin Islands to El Salvador, where it says it is authorised as a stablecoin issuer and digital asset service provider, supervised by the National Commission of Digital Assets.^[1] Tether also issues other tokens, including XAU₮, a gold-backed token it launched in 2020.^[3]

New to the category? Start with what is a stablecoin. This page is a fact sheet on one issuer, not a general explainer.

How does USDT work?

USDT is a token that runs on existing blockchains rather than on a network of its own, and Tether keeps control over it: its terms allow Tether to freeze tokens and blacklist addresses.^[1] That central control is the clearest difference between an issuer-run stablecoin and a decentralized cryptocurrency with no issuer.

Two markets keep the price near $1. In the primary market, customers deal with the issuer to create or redeem tokens. In the secondary market, everyone else trades USDT on exchanges. Federal Reserve economists describe how arbitrage between the two helps hold the peg.^[8] For USDT the primary market is narrow: using 2022 data, the Fed counted 79 unique primary-market participants for USDT, against 88,341 for USDC.^[8]

Table sources: Tether's terms of service and fee schedule.^[1][2]

How are new USDT created and redeemed?

New USDT are created when a verified customer sends dollars to Tether and Tether issues the same number of tokens. They are destroyed when a customer hands tokens back and Tether pays out dollars. Tether's published fee schedule sets the terms.^[2]

1. Get verified. Tether charges a one-off, non-refundable verification fee of $150, paid in Tether tokens.^[2]

2. Acquire tokens. Send at least $100,000; Tether charges 0.1% on issuance.^[2]

3. Redeem tokens. Return USDT and pay the greater of $1,000 or 0.1%. Tether says withdrawal requests can take several days to process.^[2]

For how this mint-and-redeem loop holds a peg in general, see how stablecoins keep their peg.

What backs USDT, and what is it used for?

Tether reports its reserves each quarter. The release for 30 June 2026, published on 31 July 2026, names US Treasuries as the leading reserve component and says Tether held more than 146 tons of gold.^[5] On the reported figures, total assets exceeded total liabilities by about 2.2% on that date.^[5] These are Tether's own numbers, checked by the accounting firm BDO under an attestation, which is narrower than a full audit.^[5] We explain the difference in stablecoin reserves and attestations.

Inside crypto markets, USDT works as a dollar-like unit. Traders can park value between trades, move funds between exchanges and settle trades on decentralized exchanges without converting back to bank money each time. Payment use across borders is covered in stablecoins and cross-border payments.

What are the key dates in Tether's history?

Tether's history mixes rapid growth with regulatory findings about its reserves. The dates below come from Tether's own pages, the US Commodity Futures Trading Commission (CFTC), the White House and Tether's accountant.^{[3][7][11][6]}

Terms date and attestation dates: Tether.^[1][5]

What are the specific risks of holding USDT?

Reserve and issuer risk. In its 2021 order, the CFTC found that Tether held enough fiat reserves on only 27.6% of the days in a 26-month sample period, relied on unregulated entities to hold reserves, mixed reserves with Bitfinex funds and held reserves in non-fiat products.^[7] Today's reserves may be different, but the episode shows why holders depend on the issuer's honesty.

Limited assurance. BDO's opinion is a reasonable-assurance engagement under the ISAE 3000 (Revised) standard on a report dated 30 September 2025. The report itself states that it does not represent the company's financial statements.^[6]

Freezes and suspensions. Tether may freeze tokens, blacklist addresses, and delay or suspend access to purchases and redemptions.^[1]

Run risk. The US Treasury's 2021 stablecoin report warns that if users lose confidence in an issuer's ability to redeem, runs on the arrangement could occur.^[9]

Regulatory access. Under a Treasury proposal from August 2026, a foreign-issued stablecoin could be offered in the US only if its issuer can and will comply with lawful orders and any reciprocal arrangement; from 18 July 2028, US service providers must limit offers to stablecoins from permitted issuers.^[10] See the GENIUS Act explained.

What mistakes do beginners make with USDT?

• Assuming they can cash out with Tether. Direct redemption needs verification and at least $100,000.^[2] Small holders sell on an exchange at the market price of the day.
• Treating USDT like a bank deposit. It is a claim on a private company, not an insured account.
• Sending on the wrong network. USDT runs on several blockchains; the sending and receiving network must match, or funds can be lost. Check an address with a block explorer first.
• Ignoring freeze rights. An address can be blacklisted by the issuer.^[1]
• Reading an attestation as an audit. It checks a report at one date, not the whole business.^[6]