How It Works
Each USDT token is backed by reserves held by Tether Limited, composed of US Treasury bills, cash, cash equivalents, and other assets per quarterly attestations by BDO Italia. Users deposit USD to an authorized exchange or directly to Tether, which mints an equivalent amount of USDT on the requested chain. To redeem, users send USDT to Tether, which burns the tokens and wires USD minus a 0.1% fee. The peg is maintained by authorized arbitrageurs who mint when USDT trades above $1 and redeem when it trades below.
Backing Type: Fiat-Backed
Fiat-backed stablecoins are collateralized by real-world assets held in bank accounts or custodied trust accounts — typically US dollars, Treasury bills, or cash equivalents. The issuer is responsible for maintaining 1:1 reserves and publishing regular attestations.