What is USDT?
Known as Tether, it is a type of cryptocurrency classified as a stablecoin.
This means that it is designed to maintain a stable value, tied to a specific fiat currency, the US dollar.
Here's how it works:
- Pegging mechanism: USDT is pegged 1:1 to the US dollar, meaning that 1 USDT is theoretically equivalent to 1 dollar.
This peg is maintained by Tether Limited claiming to hold an equivalent amount of US dollars or other assets as reserve for every USDT in circulation.
- Function: USDT acts as a bridge between cryptocurrencies and fiat currencies, providing stability in the volatile crypto market.
Traders often use USDT to transfer funds between different cryptocurrencies without converting them back into fiat currency, which can be slower and more expensive.
- Controversies and support: Tether has faced scrutiny over its support, with questions about whether it holds enough reserves to cover all the USDT in circulation.
Despite this, Tether has been profitable, reporting large reserves in 2024, indicating that it is well backed against the circulating supply.
- Trading utility: The stability of USDT makes it preferable for trading on cryptocurrency exchanges, where it is used to hedge against market volatility, or as a medium of exchange without the need to convert back to fiat currencies for each transaction.
Cheapest ways to buy USDT in UAE on Binance:
When buying USDT on Binance, you are looking for ways to reduce fees and transaction costs.
Here are some strategies based on general practices, taking into account the options I have listed:
- Credit or debit card:
Fiat Gateway: Binance offers direct purchases with credit/debit cards.
However, these transactions often come with higher fees due to conversion rates and transaction fees from banks.
Look for promotions or discounted fee periods on Binance or through partnerships, which may sometimes offer a lower price.
- Also Apple Pay:
If Binance supports Apple Pay for purchases in your region, this may be more convenient and may bypass some card fees.
However, like credit cards, fees may still apply, but the speed and convenience may offset some of the costs if you consider time as a factor.
- P2P trading:
This Binance P2P platform allows users to buy USDT directly from other users in your region (UAE in this case) through various payment methods including bank transfers, which can be cheaper due to low or no intermediary fees.
Here's how to handle this:
- Choose local merchants: Choosing sellers based in the UAE can reduce transfer fees and times.
- Negotiate or search for low-fee ads: Search for ads with low or no fees.
Some sellers may offer USDT at a slight premium or discount, but with no or minimal transaction fees.
- Use local payment methods: Sometimes, using local bank transfer, e-wallets like CashU or similar local options may incur international transaction fees.
- General tips to reduce costs:
- Timing: Buying USDT when the market is less active may give you a better price due to lower demand.
- Volume discounts: If you're buying in bulk, some platforms offer reduced fees or better rates for larger transactions.
- Compare exchanges: While you focus on Binance, occasionally check if other exchanges have promotions or lower fees for USDT purchases, although transferring between exchanges may introduce other costs.
Remember, while these methods can reduce costs, always keep security in mind. Direct bank transfers or P2P trades require trust in the counterparty, so be sure to follow Binance’s security guidelines, including checking the reputation of sellers on P2P marketplaces.
Also, keep an eye on the broader crypto market as major updates or news can temporarily impact stablecoin prices, potentially providing buying opportunities at lower prices.
