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USD-T (₮) or tether is a cryptocurrency that is firmly fastened with the traditional fiat currency to acquire stability. In this short and brief article on the USD-T, we’ll walk you through the fundamentals of USDT, why it is created and why should you invest in it?
What is USD-T or Tether?
It is a specialized kind of cryptocurrency released on the Blockchain-driven bitcoin with an aid of Protocol Omni. Its value in terms of the exchange rate is restrained to the US dollar thereby the owner of this cryptocurrency won’t face exchange rate volatility issues.
USD-T has too many similarities with the bitcoin because like bitcoin it can be easily transferred, traded, or used as a default medium of payment.
In order to securely store USD-T, you need to acquire a specialized kind of wallet that must be Omni compatible. What makes Tether or USD-T set apart from the other cryptocurrencies is its crypto coins circulations are backed by a traditional fiat currency like the US, Euro, or Japanese Yuan.
Before we delve deeper into the details of USD-T, we would like to discuss stablecoins first.
What are Stablecoins
A stablecoin is a cryptocurrency that is designed to maintain a price stability. As the stablecoin are relatively resilient to volatility and certain unexpected market events such as bearish behavior of investor towards cryptocurrencies.
As the demand for stablecoins surges, number of stablecoin projects come into the picture and the most prominent of them all is USD-T.
A Complete Explanation of USD-T
Tether or USD-T is a specialized kind of cryptocurrency that is generally regarded as the stablecoin and it is geared towards keeping the price of cryptocurrency stable. In contrast to other well-known cryptocurrencies like bitcoin or Ethereum whose prices are always subject to excessive volatility.
Relative price stability of stablecoins particularly USD-T paves the way for its usage as a default medium of exchange or a store of value instead of being used as a speculative investment vehicle.
USD-T is envisioned as a fiat-collateralized stablecoin that means the circulation of its crypto coins is backed by a traditional fiat currency like USD or Euro.
USD-T was initially designed with an aim of stability by bridging the gap between the fiat money and the cryptocurrencies. Soon after its inception, it is effectively used for cross-border remittance transfer because it imposes a very minimal transaction processing fee on its users.
USD-T is closely tied with the U.S. dollar and maintains a 1-to-1 ratio with the U.S. dollar in terms of its market valuation.
According to the recent survey conducted by the Wall Street Journal, 80% of the bitcoin transactions are done by leveraging USD-T. Aside from that, USD-T is the greatest source of stability in the crypto market.
Reasons for Investing in USD-T
If the USD-T is tied with the traditional local fiat currencies like USD or Euro and the fiat currency sometimes lose their value due to major economic disruption.
If this the case, you might be perplexed why should I invest my hardly-earned money into the USD-T? Here are a couple of valid reasons for that:
Transaction Processing Time
- In a contemporary banking system, USD deposits and withdrawals often take at least 1-4 days to process completely. If the transaction takes place at night or weekends then the time taken would be quadrupled.
- USD-T won’t take more than a few minutes to successfully process a transaction which is highly encouraging for crypto traders who are interested in the execution of their trade within a minutes and can’t wait for days.
- You’ll experience much stability in the cryptocurrency prices if you choose to buy them with a USD-T instead of fiat currency.
- Many cryptocurrency exchange platforms often refrain from accepting fiat money, but they accept USD-T
- SWIFT (Society for Worldwide International Financial Telecommunication) transfers are costly at $20-$30. Particularly if you are using fiat then you are incumbent to pay forex conversion charges.
- USD-T doesn’t charge even a single penny between its different wallets.
As USD-T is much resilient to the price volatility, it is gaining too much traction from the crypto enthusiasts. But before start investing into the stablecoins like USD-T, we strongly recommend you to do some research before and always try to stay informed because informed decisions always bring promising outcomes.