USDT is a stablecoin (stable-value cryptocurrency) that is “tethered” to the price of the U.S. dollar. The token’s peg to the USD is achieved via maintaining a sum of commercial paper, fiduciary deposits, cash, reserve repo notes, and treasury bills in reserves that is equal in USD value to the number of USDT in circulation.
The coin was launched in 2014 under the name Realcoin, a second-layer cryptocurrency token built on top of Bitcoin’s blockchain through the use of the Omni platform. In addition to Bitcoin’s, USDT was later updated to work on the Ethereum, EOS, Tron, Algorand, and OMG blockchains.
The stated purpose of USDT is to combine the unrestricted nature of cryptocurrencies — which can be sent between users without a trusted third-party intermediary — with the stable value of the US dollar.There has been a massive amount of controversy associated with Tether and many conspiracy theories about whether Tether really has the paper to back up their stable coin or if there is a magic trick being performed. A Bloomberg article reported this year that executives at Tether may be facing a criminal probe for misleading banks.