USDT, also known as Tether, is a stablecoin designed to keep its value close to 1 US dollar. Unlike Bitcoin or Ethereum, USDT is not mainly used for price growth — it is used to transfer value, trade on crypto platforms, store funds in a dollar-denominated asset and move money between different blockchain networks.
USDT is issued by Tether and exists on multiple networks, including Ethereum, Tron, Solana, TON, Aptos, Avalanche, BNB Smart Chain, Celo, Near, Tezos and others. The network you choose affects transaction fees, speed and wallet compatibility, so it is important to check both the network and the address format before sending funds.
In this guide, we explain what USDT is, how Tether works, what backs the stablecoin, which USDT networks exist, how to buy USDT and store it, and what risks users should understand before using it.
Key Takeaways
- USDT is the largest stablecoin in the crypto market, pegged to the US dollar and widely used for transfers, trading, payments and storing value in a dollar-denominated crypto asset.
- Tether is not mined like Bitcoin. New USDT tokens are issued centrally by Tether and are designed to be backed by the company’s reserves.
- USDT exists on multiple blockchain networks, including Ethereum, Tron, Solana, TON, Aptos, Avalanche, BNB Smart Chain and others. Tokens from one network must not be sent to an address on another unsupported network.
- The main advantages of USDT are high liquidity, broad exchange support, a price that usually stays close to $1 and availability across many wallets, exchanges and payment services.
- The main risks of USDT include centralized issuance, reliance on Tether’s reserves and policies, possible address freezes, regulatory pressure, short-term deviations from $1 and mistakes when choosing a transfer network.
- Before buying or storing USDT, users should check the network, transaction fee, wallet type, custody model, service reputation and the conditions for exchanging USDT into fiat or other stablecoins.
What does the USDT stablecoin mean?
United States Dollar Tether is the first and most popular stablecoin in the crypto market: a crypto token with a price that is designed to stay close to a fiat currency, in this case the US dollar. USDT was issued in 2014 by Tether Limited.
There are other stablecoins pegged to the dollar, for example USDC — USD Coin, issued by Circle.
Why was USDT created?
Tether was created in October 2014 on the Omni Layer protocol on the Bitcoin blockchain as a more stable alternative to the first cryptocurrency for payments and trading. Its original name was RealCoin. The project was renamed in the same year. One of the first major crypto exchanges to launch trading in Tether was Bitfinex. Tether and Bitfinex have historically been connected through shared executives and corporate structure, so the companies were viewed by the market as closely related from the outset.
As early as 2014, the creators called Tether a digital bridge to a real-world asset. The goals included:
- providing an alternative to unstable cryptocurrencies;
- converting fiat into cryptocurrency at a ratio close to 1:1;
- increasing trust through reserve verification and regular reporting;
- transferring national currencies, including cross-border payments;
- integrating with various services for bill payments, trading and financing;
- reducing market risks when storing funds in a dollar-denominated asset.
Coin characteristics
When describing Tether (USDT), it is often noted that it is a coin with key attributes:
- stability, based on reserve backing — to use the advantages of digital transactions on the blockchain without the typical risks of high volatility;
- transparency — Tether publishes information about tokens in circulation and regularly discloses reserve data;
- convergence of crypto and fiat thanks to the simple exchange of dollars for Tether and vice versa through supported services.
How Tether works
According to the company’s documentation, the circulation of USDT tokens can be described as a cycle:
- A user, company, crypto exchange or other crypto service deposits fiat funds or another eligible asset as part of the token issuance process;
- The company issues tokens at the equivalent of 1 USD = 1 USDT;
- The user receives USDT in the amount accepted for issuance;
- The user carries out operations: transfers, stores, exchanges or uses USDT in crypto services;
- During redemption, the user returns Tether through a supported redemption process;
- The company burns the returned tokens and returns the corresponding fiat equivalent to the user or settles the transaction according to its terms of service.
What backs the coin
Each 1 USDT is intended to be backed by Tether’s reserves in an amount sufficient to support its peg to the US dollar. Accordingly, the answer to the question of what 1 USDT equals is simple: the USDT to USD rate is designed to stay close to 1:1.
Tether’s dollar backing has repeatedly raised doubts and controversy. Initially, the company stated that all tokens were fully backed by US dollars. In 2019, Tether Ltd changed its collateral policy, adding “other assets and future loan proceeds” from third-party loans as backing. At that time, it was stated that Tether was backed by the US dollar by only 74%.
Historically, the main basis for doubt was the lack of a full independent audit of Tether Ltd and the fact that part of the reserves consisted not only of cash dollars, but also of other assets. The situation has changed: Tether publishes quarterly reserve reports, and in August 2026 the company said that KPMG U.S. had performed its first full independent audit of the 2025 financial statements. Reuters reported that the audit itself was not made public, while KPMG confirmed an unqualified opinion on Tether International’s 2025 financial statements. Even so, users should still understand the structure of reserves, redemption terms and the centralized nature of the issuer.
According to Tether’s transparency reporting, the issuer’s assets exceed its liabilities, while information about tokens in circulation is typically published daily. Reserve composition and token supply can change over time, so users should rely on the latest transparency reports and the supported network list before making decisions involving large sums.
Mining possibility
Tether is not mined, which means USDT issuance does not happen through Proof of Work or another mining mechanism, as with some cryptocurrencies. New tokens are issued centrally by Tether under its issuance procedures and are intended to be backed by reserves. This difference from classic digital assets is explained by USDT’s main purpose — to act as an intermediary between real-world and virtual assets.
The maximum coin issuance is not set by a fixed algorithm. It depends on demand, issuance and redemption procedures, and the issuer’s ability to maintain sufficient reserves for the tokens in circulation.
Advantages and disadvantages of the first stablecoin
Although Tether is a “bridge” from the fiat dollar into cryptocurrencies, the project has attracted a great deal of criticism, accusations and suspicion. Let’s highlight the main pros and cons of working with Tether.
|
Advantages |
Disadvantages |
|
Stable rate close to $1 |
Mandatory KYC when depositing funds directly into Tether’s accounts |
|
High liquidity |
Centralized issuance and management |
|
Availability on different blockchains |
Dependence on reserves, issuer policy and terms of service |
|
Reserve backing and regular reporting |
Historically controversial reputation and increased regulatory attention |
|
Wide acceptance by exchanges, wallets and payment services |
Risk of address freezing or refusal of service if terms are violated |
|
Speed and low cost of USDT transactions on Tron, TON, Solana and some L1/L2 networks |
Risk of losing funds when sending tokens to the wrong network |
|
Significant market capitalization |
Short-term deviations from $1 during market stress |
|
Easy dollar-denominated settlements |
Fees depend on the selected network and can be high on Ethereum |
|
Availability of reporting and the first full independent audit of 2025 financial statements |
Users still need to assess reserve composition and redemption conditions |
|
A common unit of account for individuals and businesses |
Direct redemption through the issuer is not available to every user and depends on Tether’s rules |
Tether subtypes
After the launch of USDT, the company issued other assets pegged to fiat currencies or backed by commodities. However, most of them have not reached the popularity of USDT:
- EUR₮ — a stablecoin pegged to the euro; Tether has announced the wind-down of EUR₮ support, so it is no longer correct to describe it as an active mass-market product;
- CNH₮ — a token pegged to the offshore Chinese yuan; its support is also limited by Tether’s terms and is changing over time;
- XAU₮, Tether Gold — a token backed by physical gold;
- MXN₮ — a token pegged to the Mexican peso;
- USDT — the company’s main product and the largest stablecoin by market capitalization.
Types of USDT
- Tether has been issued or supported on different blockchain protocols, including Omni (Bitcoin), ERC-20 (Ethereum), TRC-20 (Tron), Liquid, Solana, TON, Aptos, Avalanche, BNB Smart Chain, Celo, Near, Tezos, Polkadot AssetHub and other networks, which contributes to growing trading volumes and higher liquidity.
- Some older networks have become legacy networks: Tether is no longer issuing or obligated to redeem Tether tokens on Kusama, Bitcoin Cash SLP, Omni Layer, EOS and Algorand. Information about these networks is maintained for historical reference.
- In 2022, USDT Polygon appeared as a convenient option for lower-cost transfers and operations in the Polygon ecosystem. Polygon infrastructure has continued to develop toward broader multichain solutions, so when working with USDT on Polygon, users should check which exact format is supported by their wallet or service.
- The idea of issuing USDT on the Lightning Network has been discussed as a potential payment direction, but users should rely only on the networks that their wallet, exchange or payment provider directly supports.
Let’s look at popular stablecoin options: USDT ERC-20, USDT TRC-20, USDT Polygon and USDT TON.
USDT on ERC-20: what is it?
In 2018, when average fees on the Bitcoin blockchain increased many times over, the token began to be issued on the ERC-20 protocol on the Ethereum blockchain, which was far more convenient for trading and crypto service integration. After that, the use of USDT on Omni fell significantly, and USDT ERC-20 became one of the key Tether variants in the market.
Issuance on ERC-20 provides additional opportunities for interaction with smart contracts and decentralized applications (dApps). The main disadvantage of USDT ERC-20 is that Ethereum network fees can be higher than fees on Tron, TON, Solana or some L2 networks.
USDT on TRC-20: what is it?
USDT on TRC-20 is Tether issued on the Tron blockchain. Tether started issuing USDT on Tron in April 2019, using the TRC-20 token standard — the Tron equivalent of Ethereum’s ERC-20 standard.
In practice, USDT TRC-20 is the same Tether stablecoin, but it moves through the Tron network instead of Ethereum. This means that transactions are usually faster and cheaper than USDT transfers on Ethereum, which made TRC-20 one of the most popular formats for sending USDT between exchanges, wallets and users.
A key point to remember is that USDT TRC-20 works only with Tron-compatible addresses. These addresses usually start with the letter “T”. If you send USDT TRC-20 to an ERC-20, BEP-20 or another incompatible network address, the funds may be lost or require complicated recovery through the receiving platform.
TRC-20 USDT is often used for everyday transfers because of its low network fees and broad support across crypto services. However, users should always check whether the receiving wallet or exchange supports USDT on Tron before confirming a transaction.
USDT Polygon
Tether launched the USDT stablecoin on Polygon in spring 2022, complementing the versions already available on other blockchain networks.
Polygon, formerly known as Matic Network, is an Ethereum-compatible ecosystem for developing and deploying decentralized applications (dApps). It is used for fast and low-cost transactions, DeFi services, NFTs, games and payment solutions. Because of its high throughput and low fees, USDT transfers on Polygon are usually cheaper than on Ethereum.
Polygon also has a high degree of compatibility, which simplifies integration with other blockchain networks and supports the development of decentralized applications. Many applications are already deployed on the network, and the native network coin is usually used to pay transaction fees.
USDT TON
USDT TON is a stablecoin issued by Tether on the The Open Network (TON) blockchain. It conforms to the Jetton standard, which allows it to be integrated into the TON DeFi ecosystem. The key advantage is fast transfers with low fees thanks to the blockchain’s high performance and sharding mechanism.
The launch took place in April 2024 and became an important event for the Telegram and TON ecosystem because users received a convenient way to send a dollar-denominated stablecoin in a fast network.
TON has support for USDT transactions in Telegram-oriented infrastructure, which simplifies transfers between users and increases stablecoin liquidity in the ecosystem.
Which is better?
Among the significant differences between the most common protocols for issuing Tether, note the following:
- Transaction speed — usually a few seconds on Tron, Polygon, Solana and TON, whereas on Ethereum operations can take longer depending on network congestion.
- Transaction fees — usually lower on TRC-20, Polygon, Solana and TON, whereas ERC-20 can be significantly more expensive when Ethereum is under heavy load.
- Compatibility — for exchanges and DeFi protocols, the specific network and token standard matter, so users should check the deposit address and supported network before making a transfer.
When choosing between USDT variants, you need to decide on the intended use. For exchange trading, the optimal option is the one supported by the specific exchange and trading pair. For frequent small transfers, users often choose TRC-20, TON, Solana or Polygon because of lower fees. Tether Polygon can be convenient for everyday payments and Web3 operations if the service supports this network.
At the same time, USDT TON is a promising option for integration into the Telegram ecosystem, fast transfers and access to DeFi solutions on the TON network.
Rate to the dollar and price
USDT is designed to maintain a value close to 1 US dollar. In normal market conditions, its price usually stays near $1, although small deviations are possible depending on liquidity, market demand and exchange-specific conditions.
As of August 2026, USDT remains the largest stablecoin by market capitalization and one of the largest crypto assets overall. According to CoinGecko, USDT is ranked among the top cryptocurrencies by market cap after Bitcoin and Ethereum, with a market capitalization of around $183 billion and daily trading volume measured in tens of billions of dollars. CoinMarketCap and other aggregators may show slightly different 24-hour volume figures because of different data sources and methodology.
USDT exists on multiple blockchain networks. The most widely used versions include Ethereum (ERC-20), Tron (TRC-20), Solana (SPL), TON, Aptos, Avalanche, Celo, Kaia, Near, Tezos and others. The exact list of supported networks may change, so users should always check whether their wallet or exchange supports the same USDT network before making a transfer.
It is also important to note that some older USDT networks are now considered legacy. Tether states that it no longer issues or is obligated to redeem Tether tokens on Kusama, Bitcoin Cash SLP, Omni Layer, EOS and Algorand, and information about these networks is kept for historical reference.
Although USDT is designed to follow the US dollar, it is not completely risk-free. Historical price data shows that USDT has traded very close to $1 most of the time, but short-term deviations have occurred during periods of market stress, low liquidity or exchange-specific imbalance. Because of this, users should treat USDT as a dollar-pegged stablecoin, not as the same thing as holding dollars in a bank account.
How to use it
The stablecoin is often used for payments on various online services, peer-to-peer transfers, settlements between users and moving funds between exchanges. One of the most important uses of Tether is buying cryptocurrencies on services that do not accept fiat funds.
It is worth noting that during significant market fluctuations, exchanging any cryptocurrency for Tether can be faster than converting it into fiat. In addition, completing a transaction in US dollars through the banking system can take several business days, whereas a USDT transaction may take a few minutes or even seconds depending on the network. The difference in fees between a USDT transfer and an international bank transfer is also often clearly in favor of the stablecoin, especially for cross-border settlements.
Which wallet to choose
Tether.to is the official Tether service. But as with other cryptocurrencies, Tether can be stored in various wallets:
- hardware — hardware wallets such as Trezor or Ledger;
- software — mobile, browser or desktop wallets;
- exchange wallets — custodial accounts on crypto exchanges.
For different protocols you can use wallets that support a specific network, such as MetaMask for EVM networks or TronLink for Tron, or universal solutions such as Trustee Wallet. When choosing a wallet, you should consider the need for frequent access, security requirements, privacy, custody model and support for the required USDT network.
Where to buy USDT
You can buy USDT on Tether’s official platform, but as noted earlier, it requires detailed verification of a natural or legal person, including name, surname, residential address and personal documents. You can also use a crypto exchange, a crypto broker or Trustee Plus to buy USDT.
USDT’s prospects as a cryptocurrency: mass adoption or scam?
Despite the large number of negative media mentions of the USDT cryptocurrency, Tether remains the largest stablecoin and one of the main liquidity instruments in the crypto market. The stablecoin is widely accepted not only by crypto services but also by platforms that need fast dollar-denominated settlement without constantly working with many national currencies.
The absence of the need to constantly convert fiat into cryptocurrencies and back makes Tether a truly in-demand asset. Positioning the crypto token as backed by reserves also contributes to the popularization of the crypto industry as a whole. Nevertheless, risks remain: if reserve quality, regulatory pressure, management mistakes or liquidity problems damage confidence in Tether, this could affect not only USDT but also the reputation of the entire stablecoin market.
FAQ
What is USDT in simple terms?
USDT is the Tether stablecoin, a crypto token whose value is designed to stay close to 1 US dollar. It is used for transfers, trading, storing funds in a dollar-denominated asset and settlements between crypto services.
What backs USDT?
USDT is backed by Tether’s reserves. These reserves may include cash, cash equivalents, short-term Treasury instruments, gold, Bitcoin and other assets. Tether publishes reserve reporting and states that its assets exceed the liabilities related to issued tokens.
What is the difference between USDT ERC-20 and USDT TRC-20?
USDT ERC-20 runs on Ethereum, while USDT TRC-20 runs on Tron. ERC-20 is widely used in DeFi and on exchanges, but Ethereum fees can be high. TRC-20 is often chosen for faster and cheaper transfers between wallets and exchanges.
Which USDT network should I choose for a transfer?
You should choose the network supported by the recipient, exchange or wallet. For lower fees, users often choose TRC-20, TON, Solana or Polygon; for Ethereum DeFi, ERC-20 may be needed. Always check the deposit network and address before sending funds.
Can USDT be mined?
No, USDT cannot be mined. Unlike Bitcoin, Tether is issued centrally by the company behind it. New tokens are created through issuance procedures and are intended to be backed by reserves.
Is it safe to keep money in USDT?
USDT is convenient for payments and storing value in a dollar-denominated crypto asset, but it is not completely risk-free. The risks include centralized issuance, reliance on Tether’s reserves, possible address freezing, regulatory pressure, short-term deviations from $1 and mistakes when choosing a network.
