Is Tether (USDT) Really Reliable?

In the world of digital currency, Tether (USDT) stands as a solid lighthouse and a marvelous bridge. Domestic investors often treat it as an equivalent to the US dollar, exchanging RMB for USDT as a trading springboard after opening an account, and converting it back to RMB when cashing out.

In 2015, Binance launched USDT, and Tether claims to use a gold standard, pegged to the US dollar at a 1:1 ratio, with a margin held at issuance. Due to strict regulations on the exchange of fiat currencies and digital currencies in various countries, OTC trading can be troublesome and carries premium risks. USDT is favored for its pegging and stable price, now leading in mainstream exchanges, with a circulating scale of 2.5 billion USD and a price close to 1 dollar.

In the future, with technological advancements and clearer regulations, USDT may optimize its pegging mechanism, using new technologies to make margin audits public and transparent. It is not only used for trading but may also play a role in DeFi lending, staking, and cross-border payments, reducing costs and increasing speed. However, the emergence of numerous stablecoins intensifies competition, and USDT needs to enhance its competitiveness and security. Its development relies on its capabilities and changes in the market and regulations, requiring investors and institutions to pay close attention.

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