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 one of the earliest and largest stablecoin in circulation, and it settles more daily trading volume than any other cryptocurrency, including Bitcoin. UK customers typically hold 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 pounds.

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 US$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 customers 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. There is no guarantee the peg holds, and it has broken before.

Why the pound sterling price of USDT moves

USDT tracks the US dollar, not the pound. One USDT is worth roughly one US dollar converted into GBP at the prevailing exchange rate, so the price you see in pounds moves with the currency pair even when the peg is holding perfectly. Holding USDT in the UK is effectively holding US dollar exposure, which carries foreign exchange risk against your home currency, and you can lose money in pound terms while the token remains at one dollar.

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 historically relied on quarterly attestations alone. In August 2026 it announced that KPMG had completed a full audit of its 2025 financial statements. An audit covers a past period and does not guarantee the reserves today, so check the transparency page for the latest reports.. 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 bank holidays, when Faster Payments and international transfers may not.
• Stepping out of volatility. Traders park funds in USDT during a drawdown instead of converting back to fiat currency, though in the UK that swap is still a taxable disposal.
• Cross-border payments. USDT is widely used for remittances in economies with limited banking access or high local currency inflation.
• Collateral in decentralised 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 holding USDT?

Stable does not mean risk free. USDT is a high-risk investment and you should be prepared to lose the money you put into it. The main risks are structural rather than price driven.

• No consumer protection. Cryptoassets are not covered by the Financial Services Compensation Scheme, and the Financial Ombudsman Service cannot consider complaints about cryptoasset activities.
• Issuer risk. Tether Limited is a private company, not a bank. USDT is not a bank deposit and carries no deposit guarantee.
• 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 on 12 May 2022, during the collapse of Terra, it briefly fell to around US0.95 on some exchanges before recovering towards US$1 later that day.
• 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. Our UK investor education page sets out the risks of cryptoasset investing in more detail.

Is USDT regulated in the UK?

Tether is issued offshore and is not authorised by the FCA. UK regulation currently applies to the businesses you deal with rather than to the token itself: cryptoasset firms must be registered with the FCA under the Money Laundering Regulations, and that registration covers anti-money laundering compliance rather than the safety or performance of any cryptoasset. CoinJar UK Limited is registered with the FCA as a cryptoasset exchange provider and custodian wallet provider, firm reference number 928767.

The UK is phasing in a broader regime that will require issuers of qualifying stablecoins based in the UK to be authorised, with the Bank of England overseeing any stablecoin judged systemic. USDT is issued outside the UK and does not sit inside that authorisation regime, so it remains an unregulated cryptoasset from a UK holder's point of view.

How is USDT taxed in the UK?

HMRC treats cryptoassets, including stablecoins, as chargeable assets for capital gains tax rather than as foreign currency. Exchanging one token for another is a disposal, so swapping Bitcoin for USDT is a taxable event and you calculate the gain or loss in pounds sterling at the time of the trade, even though no GBP changed hands. Selling USDT for pounds is also a disposal, and because USDT is dollar-denominated, a gain or loss can arise purely from movements in the GBP/USD rate.

HMRC sets out the rules in its guidance on paying tax when you sell cryptoassets, and our guide to crypto tax in the UK explains how it applies in practice. This is general information, not tax advice, so speak to a qualified accountant 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 always confirm the network before you move it.