How does Tether's stablecoin work and what impact does it have on the crypto market?

1 answers

• Mar 06, 2022 · 3 years ago
  Tether's stablecoin, USDT, operates by using a combination of blockchain technology and traditional banking systems. Each USDT token is issued by Tether Limited, a company that claims to hold an equivalent amount of US dollars in reserve. This means that for every USDT in circulation, there should be an equal amount of US dollars held in Tether's bank accounts. The company periodically undergoes audits to verify the reserves and ensure transparency. As for its impact on the crypto market, Tether's stablecoin has become a popular choice for traders and investors due to its stability and liquidity. It provides an easy way to move funds between different cryptocurrencies and acts as a safe haven during times of market volatility. However, it has also faced criticism and controversy, with concerns about the transparency of its reserves and potential market manipulation. Overall, Tether's stablecoin has had a significant impact on the crypto market, providing stability and liquidity while also raising important questions about the future of stablecoins.
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