What Is USDT? Stablecoins, Pegs and Depeg Risk

USDT (Tether) is a stablecoin: a token designed to be worth exactly one US dollar. It exists so traders can hold dollar-like value on-chain — moving between exchanges in minutes and parking profits without touching the banking system.

How the peg works

Tether, the issuing company, claims every USDT is backed by reserves (mostly US Treasury bills and cash equivalents). Arbitrage keeps the price at $1: if USDT trades at $0.99, traders buy it and redeem for $1; if it trades at $1.01, they sell newly issued USDT until the price falls back.

USDT vs. USDC vs. DAI

• USDT: largest by volume, especially in Asia; quarterly attestations rather than full audits.
• USDC: issued by Circle; monthly attestations, perceived as more regulated in the US.
• DAI / USDS: over-collateralized by crypto on-chain; no company to trust, but smart-contract risk instead.

What is depeg risk?

A stablecoin can trade below $1 when the market doubts its reserves — USDT briefly depegged during past panic events before recovering. "Stable" describes the target, not a guarantee. Size your exposure accordingly, and never keep emergency funds in a single stablecoin.

Checking real rates

In some markets USDT trades at a premium or discount to official FX rates (for example the USDT/CNY over-the-counter price). Our converter shows live cross-validated rates for USDT against USD, CNY, EUR, JPY and GBP.