Each USDT token is intended to maintain a value of $1, and Tether claims that reserves of equivalent value, including cash and financial instruments, fully back its stablecoins.
Tether operates on multiple blockchains, including the Ethereum blockchain. It offers a variety of stablecoins in addition to USDT, such as EURT, which is pegged to the value of the euro. The company claims to operate in compliance with regulations and has faced controversy in the past related to concerns about the backing of its stablecoins. In response, Tether has provided regular updates on its reserve makeup and has undergone audits by independent accounting firms.
Stablecoins like USDT have several potential uses in the cryptocurrency space, including as a more stable alternative to other volatile crypto assets and as a means of facilitating transactions or storing value on blockchain platforms. Tether's stablecoins can be traded on various cryptocurrency exchanges and created or redeemed under certain conditions.