Tether’s USDT Market Capitalization hits $65 Billion – Tether pioneered the use of stablecoins in July 2014. Seven years later, USDT retains its dominant position as the market leader in the industry, as it reached a $100B total dollar supply.
As of August 2021, Tether has grown into a $65B supply. Regulators, institutions, and governments now recognize Tether as a genuine disruptive Fintech.
Today, it is clear that Tether played an important role in shaping the future of money worldwide. To further understand this, let us first define what is a stablecoin. Let us know how it expedited the economic situation and delivered innovative solutions for the financial sector.
Definition of Stablecoin
Stablecoin is an industry term that refers to a digital asset issued on a blockchain. Its goal is to maintain the most stable price as much as possible. A stablecoin’s value changes on the asset it is pegged to, but the goal is to always track the assets closely. It is important to note though that not all coins are ‘stable’.
In USDT’s case, however, it is always redeemable for $1. Meaning, the stability of USDT is the same as the value of one dollar. Furthermore, Tether also issues other stablecoins staked in Euro, offshore Chinese Yuan, and even Gold.
Stablecoins can be both ‘collateralized’ or ‘non-collateralized’. Collateralized stablecoins are backed by traditional assets like cash, commercial paper and treasury bills. On the other hand, non-collateralized stablecoins or ‘algorithmic stablecoins’ are not backed by any collateral. It uses a more complex mechanism and system features which are not always successful.
Reasons to Choose Stablecoins
Tether saw the potential of stablecoins. It played a key role in the future of money. Today, it is obvious that the shift to digital money and stable coins is already happening.
The modern payment that we know today allows easy transactions but sometimes delayed settlements. However, with stablecoins, users can experience both easy transactions and fast settlement.
What’s more, is that stablecoins can be stored in a crypto wallet. As many already know, the rise of cryptocurrency and crypto trading is widespread today.
Conclusion
As mentioned above, Tether established the use of stablecoins today. This speaks so much about Tether’s capabilities and influence on the financial market. With USDT’s rising popularity and value, more people invest in Tether today.