Buy Tether

Tether (USDT) is a stablecoin designed to hold a value of one US dollar, backed by reserves held by its issuer, Tether Limited. It is the oldest and largest stablecoin in circulation, and it settles more daily trading volume than any other cryptocurrency, including Bitcoin. Americans typically buy USDT to move value between platforms quickly, to price trades against a dollar-denominated asset, or to step out of a volatile position without converting back to cash.

How does Tether (USDT) operate?

USDT is a token that represents a claim on US dollar reserves rather than a blockchain of its own. Tether launched the token in 2014 under the name Realcoin, built on Bitcoin's Omni Layer, and renamed it Tether later that year. At a time when very few exchanges could hold reliable banking relationships, USDT became the workaround: a dollar-equivalent unit that could move between exchanges on a blockchain instead of through the banking system.

That original purpose still explains most of its use today. USDT gives traders a stable unit of account inside the cryptocurrency system, which is why it appears as the base pair for thousands of markets worldwide. If you want the broader picture of how price-stable tokens work, our guide to what a stablecoin is covers the main designs and how they differ.

How does USDT stay at one US dollar?

USDT holds its peg through issuance and redemption rather than any algorithm. Verified corporate customers can create new USDT by sending US dollars to Tether, or redeem USDT back for dollars, subject to a minimum redemption amount of $100,000. When USDT trades slightly below a dollar on the open market, those customers can buy it cheaply and redeem it at par, and that arbitrage pulls the price back toward one dollar.

Retail buyers do not redeem directly with Tether. You access the peg through exchanges and liquidity pools, which is why USDT can drift a fraction of a cent either side of a dollar during volatile periods before arbitrage closes the gap.

Does one USDT always equal one dollar?

Not exactly, and not guaranteed. The dollar peg is a design target maintained by the issuer and by market arbitrage, not a legal entitlement for the person holding the token. Day to day the price sits within a fraction of a cent of a dollar. Under stress it can move further, and it has, which is why the peg is best understood as reliable rather than fixed.

What backs USDT?

Tether reports its reserves each quarter in an attestation prepared by an external accounting firm, published on the Tether transparency page alongside the tokens on issue. The majority of those reserves sit in US Treasury bills and equivalent short-term instruments such as reverse repurchase agreements and money market funds. The remainder is spread across gold, Bitcoin, secured loans and other investments.

There is an important distinction to understand here. An attestation confirms balances at a single point in time under agreed procedures. A full financial audit examines the underlying controls and records across a reporting period. Tether operated for years on attestations alone and has since said it engaged a major accounting firm to complete a full audit. Check the transparency page for the current status before you rely on either. By comparison, USDC's issuer, Circle, is a listed US company that reports its reserves monthly, which is one reason some holders treat the two stablecoins differently despite both tracking the dollar.

What do people use USDT for?

• Trading. USDT is the most common base pair on global exchanges, so most altcoin prices are quoted against it.
• Moving value between platforms. Blockchain settlement runs continuously, including weekends and federal holidays, when ACH and wire transfers do not.
• Stepping out of volatility. Traders park funds in USDT during a drawdown instead of converting back to cash, though that swap is still a taxable event.
• Cross-border payments. USDT is widely used for remittances in economies with limited banking access or high local currency inflation.
• Collateral in decentralized finance. Lending markets and liquidity pools use USDT as a dollar-denominated deposit.

Which blockchain network is USDT on?

Tether issues USDT on many networks, including Ethereum, Tron, Solana, Polygon, Avalanche and several Ethereum layer 2s. These are not interchangeable. USDT held on one network can only be sent to an address on that same network, and sending it to a platform that does not support that network is one of the most common ways people permanently lose stablecoins.

CoinJar supports USDT as an ERC-20 token on the Ethereum network. Before you deposit or withdraw, confirm the network on both sides of the transfer against our list of supported cryptocurrencies and networks, and read what happens if you send crypto to the wrong network so you know what is and is not recoverable.

What are the risks of buying USDT?

Stable does not mean risk free. The main risks are structural rather than price driven.

• No government protection. USDT is not a bank deposit. It is not insured by the FDIC, protected by SIPC, or guaranteed by any government agency.
• Issuer risk. Tether Limited is a private offshore company, not a bank, and your claim in a stress scenario is on that company.
• Transparency. Quarterly attestations are less frequent and less rigorous than a completed annual audit, and reserves include assets such as Bitcoin, gold and secured loans that can fall in value.
• Depeg risk. USDT has broken its peg before, most notably in May 2022 during the collapse of Terra, when it traded near $0.95 for several days before recovering.
• Redemption terms. Tether's terms of service allow it to delay or suspend redemptions in certain circumstances, including illiquidity of its reserves.
• Freezing. Tether can freeze USDT at the smart contract level and regularly does so at the request of law enforcement agencies. Tokens in a frozen address cannot be moved.
• No yield. Holding USDT pays you nothing by default, while the reserves behind it earn interest for the issuer.

The Bank for International Settlements has published useful neutral analysis of these structural questions in its bulletin on stablecoin growth and policy challenges.

Is USDT regulated in the US?

Not as a US stablecoin. The GENIUS Act created a federal framework for payment stablecoins, under which a token offered to US customers must come from a permitted issuer: an insured bank, a federally qualified nonbank approved by the OCC, or a state-qualified issuer. Those issuers have to hold full reserves in cash and short-term Treasuries, publish monthly attestations, and honor redemptions.

USDT is issued offshore and is not a permitted payment stablecoin under that framework. The law phases in over several years, and from July 2028 it becomes unlawful for a digital asset service provider to offer a payment stablecoin to US customers unless the issuer is permitted, or unless a foreign issuer registers with the OCC and its home regime receives a comparability determination from the Treasury. Tether's response has been to launch a separate token, USAT, issued in the US by Anchorage Digital Bank, a federally chartered bank. USDT itself remains the offshore token.

State rules apply on top of the federal ones. New York's financial regulator, for example, has not approved USDT for listing by the firms it supervises, so availability varies by state. CoinJar, Inc. is registered with FinCEN as a money services business, NMLS ID 2492913, and holds money transmitter licenses in a growing number of states.

How is USDT taxed in the US?

The IRS treats digital assets, including stablecoins, as property rather than currency. Swapping Bitcoin for USDT is a disposition, so you calculate the gain or loss in dollars at the time of the trade even though you never touched cash. Selling USDT for dollars is also a disposition, though the gain is usually small because the price barely moves.

The IRS sets out the rules on its digital assets page. This is general information, not tax advice, so speak to a qualified tax professional about your own position.

Why Tether matters

USDT is the settlement layer most of the cryptocurrency market runs on. Its size and liquidity are what make it useful, and its offshore, privately issued structure is what makes it worth understanding before you hold a large balance. Treat it as a dollar-denominated instrument with a specific issuer behind it, keep an eye on the reserve reporting and the shifting US rules, and always confirm the network before you move it.