What is Tether (USDT)?

Is USDT always worth $1?

Most days USDT trades within a fraction of a cent of $1. From 2025-11-18 to 2026-10-23, its daily close on Binance ranged from 0.99790 USD to 1.00090 USD. Each exchange has its own trades, so the price on one exchange rarely matches another exactly.

Is USDT the same as USD?

No. A US dollar is issued by the US government. USDT is a token issued by Tether Operations Limited, a private company headquartered in El Salvador.

Holding USDT means you trust Tether to keep enough reserves and to honor redemptions. It is not a bank deposit, so no deposit guarantee covers it. Tether can also freeze your tokens and, if law enforcement or a court requires it, destroy them. In 2026 Tether said it had frozen nearly $550 million of USDT linked to Iran, and in March 2025 it froze about $27 million held by Garantex, a sanctioned Russian exchange.

Can I convert USDT to dollars 1:1?

Almost. Most people swap USDT for dollars on a crypto exchange or OTC desk, which usually charges a fee.

Verified Tether customers can also redeem USDT for dollars directly through Tether's website, with a minimum of $100,000 per redemption. Tether charges a one-time verification fee (150 USDT), plus a fee on each redemption.

How does USDT keep its peg to the dollar?

Tether creates 1 USDT token when a customer deposits a dollar, and burns it when the customer redeems it. Tether promises that one USDT can be swapped for one US dollar, and backs that promise with reserves, mostly short-term US Treasury bills.

If USDT trades below $1 on exchanges, large traders can buy it cheaply and redeem it with Tether for $1. That buying pushes the price back toward $1.

What backs USDT?

On 30 June 2026, Tether reported $187.75 billion of assets against $183.64 billion of liabilities, a buffer of about $4.1 billion. About 75% was cash and short-term deposits, mostly US Treasury bills. Gold was 10%, secured loans 7% and bitcoin 3%.

Treasury bills are among the easiest assets in the world to sell. Gold, secured loans and bitcoin, about a fifth of the reserves on 30 June 2026, could take longer to sell in a crisis, and gold and bitcoin can fall in price.

These figures come from a quarterly attestation by the accounting firm BDO. An attestation checks the reserves on one day. It is not a full audit of Tether's accounts.

Does Tether pay interest?

No, USDT pays you no interest. Tether keeps the income from the reserves: about $1.5 billion of net operating profit in the second quarter of 2026 alone.

Has USDT ever lost its peg?

Yes. Tether (USDT) has lost its $1 peg several times, usually for hours or days before recovering. In October 2018 USDT fell to about $0.85 on Kraken as traders questioned its reserves.

On 12 May 2022, during the TerraUSD collapse, USDT traded down to about $0.95. Tether said it redeemed more than $300 million in 24 hours at $1, and the price was back near $1 the same day.

Is USDT safe?

The USDT stablecoin has stayed close to $1 for most of its history, but it carries risks a bank deposit does not. You rely on Tether to keep enough reserves, on gold and bitcoin in those reserves to hold their value, and on Tether not freezing your tokens.

Tether's reserves are checked once a quarter by an attestation, not a full audit. On 30 June 2026 they exceeded its liabilities by about $4.1 billion, half the buffer it reported three months earlier.

Can I still buy USDT in Europe?

You can hold USDT in the European Union, but licensed EU exchanges delisted it because Tether has no authorization under MiCA, the EU's crypto rules.

Is it illegal to hold USDT in Europe?

No. MiCA regulates crypto platforms, not the people who use them. Token custody and transfers of USDT are still possible for European customers. There are MiCA-authorized stablecoins, such as USDC and EURC, issued by Circle.

USDT follows the dollar, not the euro. For an EU holder, its value in euros rises and falls with the EUR/USD exchange rate.