The story of Tether cryptocurrency, island of stability in a raging crypto ocean
Posted on Oct 22, 2024 / Finance / Technology
Tether (coin ticker USDT) is a cryptocurrency that is pegged to the value of the US dollar, meaning that for every Tether token issued, there is an equivalent amount of US dollars held in reserve.
Tether was created by Tether Limited, a company that claims to be headquartered in Hong Kong, with the intention of providing a stable, digital alternative to traditional fiat currencies.
Tether was first issued in 2014 on the Bitcoin blockchain as an Omni token and later moved to the Ethereum blockchain as an ERC-20 token. It quickly gained popularity, especially among cryptocurrency traders, as it provided a way to move funds between different cryptocurrency exchanges without the need to convert back to fiat currency and incurring high fees.
However, Tether has faced controversy over the years. The first controversy is that Tether Limited has not been transparent about its financials, leading to concerns about the company's ability to redeem all the Tethers in circulation for the equivalent amount of US dollars held in reserve, this led to critics and analysts claiming that Tether was being used to manipulate the cryptocurrency market, specifically Bitcoin's price.
Another controversy is about the lack of a proper audit for Tether, the company has been using different accounting firms over the year but none of them was able to fully confirm Tether's reserves.
Tether remains one of the most widely used stablecoins, but it's important to note that controversies around Tether and its management have led to questions about the coin's stability and transparency. It is always recommended to carefully research any investment before making a decision and to consult with a financial advisor.
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