How USDT works
USDT, or Tether, is the largest US dollar stablecoin by market capitalisation. Each token aims to be redeemable for one US dollar, backed by reserves of cash, treasuries, and short-term debt held by Tether Limited. It exists on many chains, settles in minutes, and is the most widely accepted unit of dollar value across crypto venues, which is why most pairs are quoted against it.
Worked example
You exit a Bitcoin position into USDT at $1.00 per token. Your value is now parked in dollars without a bank transfer, ready to redeploy the moment the next setup appears. Because USDT is accepted almost everywhere, you can move it between venues and into new pairs faster than fiat would ever settle. That ubiquity is its main advantage over rivals.
USDT versus USDC
USDT leads on liquidity and acceptance; USDC leads on reserve transparency, with monthly attestations and a more conservative backing profile. Both target the same dollar peg. Volity accepts USDT and USDC deposits on the major chains with zero deposit fees, clearing in minutes, so you can fund a Markets account with either.
Why it matters
USDT is the de facto dollar of crypto, but it is a private issuer’s liability, not a bank deposit, and its peg depends on reserve quality and redemption. Treat it as working cash, watch the issuer’s disclosures, and do not assume “stable” means risk-free. Related: DeFi, where USDT is a core settlement asset.
Read the full breakdown in our crypto trading guide.
