What is USDT

USDT, or in another name Tether is a type of cryptocurrency. It falls under the category of stablecoins under cryptocurrency. USDT operating in Hong Kong, by a company named Tether. USDT is special compared to other cryptocurrency because it is designed to remain value at USD 1 each by backing the supply of USDT with assets held in reserve.

As a cryptocurrency, it can be easily transferred to anywhere in the world as it is digital and programmable. The value of USDT is less fluctuate compare to other cryptocurrency because it is a US Dollar backed asset, which means their value is backed by trust in US dollar.

How USDT work

USDT enters the system when the tether company produce it. When customer make a payment to tether company as they want the USDT, the tether company will add the funds into its reserves and produce new USDT for the customer.

USDT will be removed from the system in the same way. When customer wants to redeem the USDT for USD, they can sell it back to tether company. Tether company will pay their company by using the reserves fund. Redeemed USDT will be destroyed and removed from the system.

How Safe is USDT

USDT is backed by trust in US dollar. However, some people suggest that USDT might not be fully backed by US dollar and believe that USDT is being printed without actual demand and reserves. In 30 April 2019, the Tether company confirmed that USDT is not filly backed by cash reserves, it was 74% backed instead of 100%. New York Attorney General Office also confirmed that tether had large cash reserves. Bitfinex initiated an ICO and started selling an exchange token called LEO in order to fill in the gap. Bitfinex is a company that working very closely related and share much of the same management.[/vc_column_text][/vc_column][/vc_row]