Tether (USDT)

The unit the crypto market uses in place of the dollar. Tether the company issues the token: it takes in funds, mints matching USDT and burns them on redemption. Backing comes from the issuer's reserves — cash and short-dated instruments such as US Treasury bills.

Technically it is not a chain of its own but a token issued on many blockchains at once, so the same USDT exists in parallel across several networks and moves between them via bridges and exchanges. Most trading volume sits in pairs quoted against it: for the majority of venues USDT is the base quote currency rather than one asset among many. Away from trading it serves as a dollar substitute where bank transfers are expensive or unavailable.

The peg is held not by an algorithm but by the issuer's commitment to redeem at par — which is to say, by confidence in its balance sheet. Direct redemption is open to large clients; everyone else buys and sells on exchange, where the price can drift from a dollar.

The recurring point of contention is the reserve composition: Tether publishes attestations on the state of its assets rather than a full audit of the kind regulated markets expect.