Tether (USDT)

Tether and USDT: purpose and uses

USDT, from Tether, is what's called a stablecoin. You might hear it described as a cryptocurrency, but its purpose isn't to chase price gains, it's intended to stay at one US dollar, as reliably as possible. Tether Limited started issuing these tokens back in 2014. If you're new to stablecoins, I recommend starting with our plain-language explainer, but here, let's focus on how USDT actually gets used.

Trading is easily the most common way you'll encounter USDT. It acts as a kind of safe harbor: say you've sold Bitcoin for USDT on an exchange. At that point, your funds sit in USDT and you're out of the volatility, without needing to withdraw or convert anything off-platform. Besides trading, USDT is often picked for quick, low-fee dollar transfers; for example, a freelancer in Argentina might accept payment in USDT or a retailer might settle cross-border invoices this way. It's fast, often clearer and cheaper than a conventional bank wire. Third, many people hold USDT where local money is unstable. That comes with some additional risks, which I'll get into below.

Because its whole reason for existing is to remain steady, the 0.9991 USD shown at the top isn't a price you'd trade on, but more a barometer of how closely USDT is sticking to its peg.

How Tether keeps USDT close to the dollar

Unlike Bitcoin, USDT isn't mined and there’s no fixed upper limit to its supply. Tether Limited creates USDT when it receives dollars from approved partners, and destroys (redeems) them when those dollars go out. Most regular buyers simply buy or sell tokens through exchanges, not directly from Tether. The key mechanism for holding the peg comes through arbitrage. If USDT is trading below a dollar, someone with redemption access can snap up the cheaper tokens and redeem them for dollars. If the price is above a dollar, they can issue more tokens and sell into the market to profit from the difference.

This system only holds if people trust that the reserves backing USDT are legitimate and accessible. Tether puts out attestation reports via an outside accountant; these are snapshots at a single point in time, not ongoing audits. You'll find details about what this means in our proof of reserves article. Attestations provide some evidence, but are not an ironclad guarantee.

You’ll see USDT on several distinct blockchains, like Ethereum or TRON. Each represents the same claim to a dollar, but tokens can’t move directly from one chain to another (so be careful which you use for sends and receives). If you’re choosing between USDT and USD Coin, or want to read a comparison, take a look at our USDT vs USDC guide.

What affects the USDT price

With a stablecoin like USDT, the price is supposed to resist movement. Over the last 30 days, its price changed by -0.05%, and if you look back a year, the swing from lowest to highest was from 0.9984 USD to 1.00 USD, with an annual difference of -0.12%. That gap matters because it shows how well the peg held. Ideally, for a token like this, that range is quite tight.

But price charts can be misleading if you view USDT in a currency besides the dollar. The rate you see will mostly reflect the local currency's moves against the dollar: for example, at this moment the dollar to euro rate is 0.895037, so the Euro price for USDT will mirror that relationship. You can track this particular pair on our EUR → USD page.

When the peg does shift, it's usually about confidence. That could come from worries about reserves, sudden legal challenges against Tether, intense selling pressure on an exchange, or wider panic. In stressful periods, stablecoins, including USDT, have slipped below the dollar temporarily, though in most cases they've returned to near-parity within hours or days. Still, there’s no certainty they'll always bounce back right away.

Ways to buy USDT and the real cost

USDT is available by a few routes. You might pay by bank transfer or card through an exchange, trade other cryptocurrencies like Bitcoin for it, or make a deal directly with someone else using peer-to-peer methods. Most people find that using an exchange with a bank transfer is the least expensive and most straightforward.

When you buy, several costs stack up. There's the exchange trading fee, almost always shown per order. There's the spread, which is the difference between buy and sell prices, our spread explainer highlights why this matters beyond the headline fee. Finally, there’s the withdrawal fee if you’re moving USDT out to your own wallet. Simple 'buy instantly' features often bury some costs in the quoted price, while advanced screens with limit orders usually cost you less.

If you pay with euros, rate conversion to dollars is an extra cost; the method matters too, since SEPA bank transfer tends to be cheaper than cards. Our step-by-step euro deposit guide shows how to minimise those charges.

Exchanges featuring USDT include Kraken, Coinbase, Bitvavo and Bitpanda. If you're comparing two platforms, our Kraken vs Coinbase overview is a good place to begin. The catch is, not every exchange makes USDT available everywhere, European stablecoin rules, under MiCA for example, restrict it in some regions. So, always check whether your chosen exchange offers USDT for your country before sending funds.

Which network to pick and where to keep USDT

Before you transfer USDT anywhere, you have to choose a blockchain network. Ethereum, Tron and others each support their own USDT tokens, but there's no room for mistakes: sender and receiver must use the same network, or the funds can get stuck or disappear completely. For a breakdown of what's available and the standards like ERC-20 and TRC-20, see our token standards guide. If you've ever sent to the wrong network, our advice page covers your options. Fees can jump or drop quite a bit during the day; always double-check the actual cost before confirming a transfer, and test with a tiny amount first if you’re unsure.

For storing USDT, you could leave it with your exchange or move it to your own wallet. If you prefer control and security, moving to your private wallet means you're now responsible for keeping your seed phrase safe. Our wallet guide lays out the differences, including how a hardware wallet benefits large balances.

One feature you should know: Tether Limited can freeze USDT in specific wallets, even if you hold your own keys. This can stop theft or meet sanction orders, but it means USDT doesn’t have the same censorship-resistance as something like Bitcoin.

Understanding risks and tax treatment

Unlike a bank account, holding USDT exposes you to the risks tied to the issuer, possible de-pegging, regulatory actions, address freezes and exchange failures. Scams targeting USDT users are common too: counterfeit tokens and fake addresses show up often, so extra care is smart. USDT is built for holding and moving dollar value, not for speculative gain, and in extreme situations it can drop in value quickly.

Tax rules for using and trading USDT differ with each country. In some places, even exchanging one crypto for another (even for a stablecoin) is taxed, and the difference between what you paid and what you sold for may also be taxable. Recording your transaction amounts, dates, and the local-market value each time you buy, sell or swap can make tax reporting easier later. Your local tax expert is the best source for the rules that apply to you, though.

If you're relying on prices listed on this site, you may want to know how they're constructed. The approach for data gathering and comparison is described in detail on our How we compare page. For more about exchange costs, our exchange fees guide is a useful reference.