Tether (USDT)
Largest stablecoin by market cap — 1 USDT ≈ 1 USD, centralized, Tether Limited.
Tether (USDT) is the largest stablecoin by market cap ($110+ billion), created by Tether Limited, a centralized company.
How it works:
•Each USDT is "backed" by a dollar or equivalent assets in reserves
•Users can theoretically exchange USDT for real USD (institutions only)
•Available on: Ethereum (ERC-20), Tron (TRC-20), Solana, BNB Chain...
Controversies:
•Tether refused full reserves audit for years
•2021: paid CFTC fine ($41M) for misrepresenting reserves
•Reserves include commercial paper, not just USD
Why dominant despite criticism:
•Liquidity — $50+ billion daily volume, more than BTC
•Acceptance — available everywhere, everyone accepts it
•Network effect — difficult to replace
Alternatives:
•USDC (Circle) — more transparent, regular audit
•DAI — decentralized, but crypto-collateralized
•FDUSD — Binance USD
Risk: "De-peg" — if Tether loses trust, $110 billion would try to exit simultaneously.