Coin columns · Ethereum City (Capital)
Tether (USDT): The Dollar Stablecoin, Its Reserves and Its Critics
Launched in 2014: reserves, redemptions and regulation
Tether (USDT) is a stablecoin, a token designed so that one unit is worth one US dollar. It is used everywhere from exchange trading to cross-border transfers, yet questions about its reserves and regulation have followed it for years.
1. Who issues it
Tether began in 2014 as “Realcoin”, founded by Brock Pierce, Reeve Collins and Craig Sellars, and was soon renamed. First issued on the Omni Layer on top of Bitcoin, it later spread to Ethereum, Tron, Solana and many other chains. The issuer, Tether, shares owners and executives with the exchange Bitfinex.
Paolo Ardoino, formerly its technology chief, has been chief executive since December 2023, and in 2025 the company moved its headquarters to El Salvador. On the Crypto Nation map, USDT stands in Ethereum City (the capital), because a coin on several chains belongs to the first chain CoinGecko lists for it, which for USDT is Ethereum.
2. How the peg is kept
Customers who pass Tether’s identity checks send dollars and receive the same number of USDT, and handing USDT back for dollars (redemption) destroys those tokens. Most people simply trade it on exchanges; when the price drifts from one dollar, large customers who can mint and redeem directly arbitrage it back.
Tether says its reserves exceed the USDT in circulation, mostly short-term US Treasury bills and similar cash-like assets, plus some gold, bitcoin and secured loans. The accounting firm BDO publishes quarterly attestations, but critics note these are snapshots, not a full audit.
3. Where it is used
USDT is a main quoting currency on crypto exchanges and the usual way to move money between them. Cheap transfers on Tron make it popular for remittances and dollar savings in emerging markets, and the Ethereum version, live since 2017, is a core asset in decentralised finance (DeFi).
Interest on its reserves has made Tether very profitable, funding investments in bitcoin mining, artificial intelligence and agriculture. After the United States passed its stablecoin law, the GENIUS Act, in July 2025, Tether announced a separate US-regulated coin, USAT, and launched it in early 2026. USDT continues as an offshore token.
4. Things to know
In 2021 Tether paid 18.5 million dollars to settle with the New York Attorney General and a 41 million dollar penalty to the US derivatives regulator (CFTC) over past claims about its reserves. In November 2025 S&P Global Ratings cut its stability assessment of USDT to the weakest level, citing riskier reserve assets. In the EU, where USDT lacks MiCA authorisation, regulated exchanges restricted trading in it.
Tether can freeze addresses, which helps law enforcement but means central control. United Nations and national agencies have reported USDT use by criminal groups and for sanctions evasion. Ultimately USDT is only as sound as its issuer’s reserves and its promise to redeem.
Written from information public up to October 2026. It does not recommend or rate any coin and is not investment advice. If something is wrong, please tell us through the contact page.