Starting August 2021, Exeno.com honours payments in four major cryptocurrencies, as USDT (also known as Tether) joins the well-established BTC, ETH and BTCV. To supplement this major development, we’ve prepared a brief outline of Tether, one of the world’s first stablecoins, including its origins and distinctive features.
What is Tether?
To unpack the nature of Tether, we must first explain what a stablecoin is. In simple terms, it’s a crypto that is designed to stay at a fixed value. Fiat-backed stablecoins, like Tether, are linked to a certain fiat currency and additionally backed by fiat money. This collateral, to the amount equal to the value of a given stablecoin currently in circulation, is stored in special financial institutions. Tether’s currency code – USDT – is a combination of USD and the word Tether, cleverly signalling that the currency is ‘tethered’ to the U.S. dollar. Thus, the two have a fixed 1:1 exchange ratio. This link with a fiat currency makes Tether’s value relatively stable. Simultaneously, its blockchain base makes it more technologically advanced than conventional currency.
Tether is now the world’s third-largest cryptocurrency by market value. Being a stablecoin, it has limited potential for market speculation and thus is usually used as a medium of exchange or store of value. It’s a perfect solution for investors who want to access the crypto market but are keen to avoid the infamous cryptocurrency value fluctuations.
It was designed to occupy a middle ground between volatile cryptocurrencies, like Bitcoin or Ether, and fiat currencies.
A brief history
Tether was launched in July 2014 under the name RealCoin. It was renamed in November of the same year, following the acquisition by Tether Limited, a Hong Kong-based company that maintains Tether’s financial reserves. Unlike most other cryptos, Tether is not decentralised – it is issued by a private company.
Tether started trading on exchanges in February 2015 and quickly rose to popularity, despite being the first stablecoin to be listed. Due to its design, a USDT has a value equal to a U.S. dollar, although the prices of the two can differ ever so slightly.
USDT as a bridge between fiat and crypto worlds
Tether is widely used in fiat-crypto conversions. As mentioned, USDT’s exchange rate stays remarkably close to the US dollar, providing a reliable store of value. At the same time, exchanging it to and from other cryptos does not involve high transaction costs and delays. Thus, investors convert crypto to Tether, and vice versa, at the right time to avoid price fluctuations. It’s much easier to use Tether than to exchange fiat money and crypto directly: in 2021, over 75% of Bitcoin exchanges involved Tether. The stability of USDT’s price, combined with its anonymity and digitalization, make this coin a valuable part of the crypto realm.
The addition of USDT to our platform aims to recognise Tether’s role and extend our offer to customers who prefer stable coin prices but don’t want to sacrifice transaction speed, anonymity, and other benefits of crypto.
To buy your favourite products directly with Tether (USDT), the world’s most popular stablecoin, visit Exeno.com and #BuyByCrypto.