What is Tether: The Most Popular Stable Cryptocurrency 

• Tether is issued when a user deposits equivalent U.S. dollars in the Tether accounts.
• It is the oldest as well as the biggest stablecoin as per market capitalization.

Tether is a popular stablecoin that is pegged to the fiat currency US Dollar, which is also known as USDT. This crypto is often used by crypto trades throughout the world as leverage for their cryptocurrency traders. This coin is expected to stay unaffected by any type of market volatility since it is a stablecoin.

A stablecoin is a coin that is often pegged to some assets, such as fiat currency, which is the most common type of asset used to peg a stablecoin. It provides a safe currency option for crypto enthusiasts to enjoy the benefits of cryptocurrencies, such as easy transfers and fast borderless transactions with security and privacy. 

History of Tether 

This crypto was launched in July 2014. At that time, it was launched under the name RealCoin but later rebranded to Tether. It is based on the Bitcoin blockchain, but along with Bitcoin, it supports various other crypto brands such as TRON, Algorand, EOS, Solana, and Ethereum. It is owned by a Hong Kong-registered company called iFinex, which is also the owner of the famous crypto exchange BitFinex.

In January 2023, Tether became the third largest crypto after Bitcoin and Ethereum, and currently, it has retained its position as the third biggest crypto with a market cap of $83.81 Billion. 

Since its launch, Tether has been involved in various controversies too. For example, in 2019, the New York attorney general obtained a court order regarding a money laundering probe into the parent company of Tether and Bitfinex, iFinex, for violating a law of New York because it borrowed at least $700 million from Tether’s reserves. 

iFinex paid nearly $60 million in fines in 2021 to settle two regulatory probes regarding its mishandling of assets and misrepresenting its reserves.

How Tether Works?

Tether is pegged 1-On-1 with the U.S. dollar. There are five crucial steps involved in the lifecycle of the Tether. 

Step 1

 This step includes depositing fiat currency into Tether’s bank account. The user who deposits Tether is a KYC-verified user. They are often business merchants, trading firms, and any crypto network participants. They are very crucial for the working of Tether, as Tether will only be issued after some users deposit Tether into the bank account of the Tether firm.

Step 2

 This step involves the Tether firm releasing tether tokens worth equivalent to the value of fiat currency deposited into the bank account of the Tether firm. Tether always releases Tether equal to the number of dollars deposited by customers. They cut some fees for issuing tether tokens, which the user has to bear.

Step 3

 Once the users get the desired amount of tether tokens they applied for, They use these tokens for various purposes like storing, transferring or converting them into other cryptocurrencies. They always maintain the same value, which is equal to $1, throughout their life.

Step 4

If the user wants to reconvert the Tether into fiat currency then, they can deposit it to the site tether. and redeem back the original fiat currency.

Step 5

Tether removes the tether tokens equivalent to which the fiat currency is redeemed by the user. This is how Tether maintains its liquidity and keeps itself pegged to the U.S. Dollar.

Conclusion

Tether has emerged as the most popular stablecoin in the cryptocurrency market, providing stability and security to crypto traders. It is pegged to the US Dollar and follows a transparent process to maintain its value. Despite controversies, Tether continues to be a significant player in the crypto space.