Tether (USDT) FAQs
What is Tether and how does it work?
Tether is one of the most popular and widely traded cryptocurrencies on the market. Known as a “stablecoin”, the token pegs its value 1:1 to the value of the fiat currency being traded. The most common Tether currently traded is USDT, the asset pegged to the US dollar. The idea behind Tether is to provide a stable digital asset for users to overcome the volatility usually experienced by cryptocurrency users. Tether is issued by a company called Tether Limited, which is in turn controlled by the owners of Bitfinex, one of the most popular cryptocurrency exchanges on the market. Tether currently issues tokens onto a series of different blockchains, such as Bitcoin (using the Omni Layer and Liquid protocol), Ethereum, EOS, Tron and a series of other networks. USDT, Tether´s native token, supposedly represents an equal number of US dollars held in the Tether treasury, although recent news has surfaced that it is only partially backed by physical dollars and a large amount of it is held in convertible notes or other financial products. It provides a large amount of the liquidity on exchanges and in DeFi, offering an easy way to hold fiat in a digital asset without concerns over the volatility.
How To Use Tether
Step 1. Create an account on a cryptocurrency exchange
USDT, Tether’s native token, sits #6 when measured by total market capitalization according to cryptocurrency information website CoinGecko. However, it quickly rises to first place when measured in 24-hour volume, with a current volume more than double Bitcoin’s at the time of writing. USDT is the most widely used cryptocurrency on a daily basis, providing easy and seamless trading and liquidity for a variety of cryptocurrency pairs. It is listed on a majority of popular exchanges, although it’s not available on Coinbase. You can find it on Binance, Crypto.com and Kraken, along with a variety of smaller exchanges. These exchanges vary in terms of fees, security, currencies supported and payment methods. Depending on your country of origin, certain exchanges might not be available to you, so it’s important to do your own research and remember that there will be an option for everyone, regardless of their location. Below, you will find a list of platforms that we have vetted for Tether.
Once you have chosen a cryptocurrency exchange, go to the platform and create an account. Look at our list of exchanges below to pick the best one for you. Remember that to buy USDT with your national currency, you will be required to present some form of government issued ID, so keep that document close by for when you need to present it.
Sign up for an account on the exchange of your choice by clicking on the Go to site button. This will take you to the exchange’s landing page, which will prompt you for your name and email address. Once these have been registered, you will need to perform a KYC (Know Your Customer) process. This is a legal requirement for the majority of exchanges and is when you present your government issued ID.
Usually, KYC is quite a fast process, although it may take up to a few days. Once you are registered and verified, you can deposit funds into your account.
Step 2. Deposit funds
Depending on the cryptocurrency exchange you choose, you will need to deposit funds into your account, register a debit or credit card or transfer cryptocurrency into the platform.
Depositing funds. The cheapest way to buy Tether is to deposit your national currency directly from your bank account into the exchange. There are usually no fees for this type of deposit and the same process can be done if you decide to sell your cryptocurrency.
Although this is the cheapest method, the trade-off is availability of funds. It usually takes a few days to clear, depending on your bank. However, once this process is finished, you can buy USDT or any other cryptocurrency available on the platform.
Using a debit or credit card: This is the fastest method of deposit, but it also comes with a number of trade-offs. It is usually the most expensive option, with some platforms charging up to 5% in deposit fees. Although its ease of use and instant purchase method are attractive, these costs can add up over time and some providers might not allow this option, as we have seen recently with some UK banks.
Using cryptocurrency. Every exchange will allow you to buy, sell or trade cryptocurrencies using crypto as a funding option. Fees and availability of funds will depend on the network you are using (exchanges usually won’t charge a fee for depositing with crypto). As such, a popular method for traders is to deposit a digital asset and use this to trade in and out of their token of choice. Some exchanges do not require KYC for those using only crypto, but that is up to the user to research.
It’s always a good idea to think about the various cryptocurrency platforms and weigh up which option will be the best for you. Each comes with its set of upsides and downsides, and it’s a good idea to have a strategy beforehand. Remember that you can always change your deposit method later on if you decide to do so.
Step 3. Buy Tether
As stated above, USDT is pegged 1:1 to the US dollar. More than a speculative asset, the token is used as protection against the volatility usually seen among cryptocurrency assets. It’s also a seamless trading pair for many other digital assets. If you wish to buy USDT, think of it as buying the value of the US dollar against your native currency.
Although there are several ways to purchase cryptocurrencies, given the fact that USDT is a stablecoin, there is no need for an order book. Usually, users are using the token to trade out of other cryptocurrencies. This is important to keep in mind, as USDT is commonly used when finalizing a trade or taking profits.
Step 4. Withdraw to a wallet
It’s important to remember that USDT is commonly used on cryptocurrency platforms. Although there are a large number of users that use it as an easy-to-trade asset in combination with other cryptocurrencies, there is still a substantial number of users that decide to hodl USDT. Once you have purchased your USDT, it is good security practice to withdraw it off the exchange and into your personal wallet. Remember to make sure that your wallet of choice supports USDT when downloading it.
Where to buy USDT
Tether is widely accepted throughout the cryptocurrency world. You can find it on almost every exchange and buy it with almost every other cryptocurrency or fiat currency. Compare exchanges by deposit method and cryptocurrency support to find the right fit: