We love stablecoins here at Wirex. Which is why we were delighted to welcome five new ones to the app late last year.
Among them was the OG stablecoin itself - Tether, or USDT. Being the first and most widely used stablecoin on the market, you’ve probably come across it before. But if not, read on to find out what it is, what you can do with it and what makes it so special.
What is USDT?
USDT was first issued in 2014 by Hong Kong-based crypto company, Tether Limited. It was designed to be a “digital dollar” that can be used in the same was as fiat currency but has all the benefits of cryptocurrency.
In order to achieve that, its value mirrors that of the US dollar, so 1 USDT = 1 USD. USDT is fiat-collateralised, which means it is backed by physical reserves (held as a combination of currency and cash equivalents) with a value equal to - or greater than - the amount of USDT issued.
The majority of USDT lives on the Ethereum blockchain, with the rest on both the Omni and TRON blockchains. Omni is a protocol layer built on top of Bitcoin which was used to issue the very first USDT tokens in 2014.
Who created it?
USDT was originally known as “Realcoin” and was conceived in January 2012 by Brock Pierce, Reeve Collins and Craig Sellars. In 2014, Tether CEO Reeve Collins announced that the project was being renamed to “Tether” and USDT as we know it launched later that year. It officially began trading in February 2015.
What can you do with it?
Traders often use USDT as a substitute for USD. While its stable nature means it can’t be traded speculatively, it can be quickly, easily and cheaply transferred between parties, which makes it an excellent alternative to traditional bank transfers. It’s also commonly used as a way of holding money on crypto exchanges when the market is particularly volatile.
These days, many businesses and freelancers use USDT as a medium of exchange for their B2B payments.
It can also be bought, HODLed, exchanged and spent in real life with the Wirex app and card, at market-leading OTC rates.
Any other facts?
While BTC remains the biggest cryptocurrency by market cap, USDT has actually surpassed it in terms of trading volume - it is officially the most frequently traded token in the world.
