What is USDT (Tether)?
USDT is a stablecoin that aims to track the US dollar at 1:1. It gives crypto users a price‑stable asset for payments, trading, and settlements.
* Note: This page is only meant for educational purposes. USDT is currently not compliant in the European Union under the MiCA regulations.
Table of Contents:
Tether (USDT)
USDT is a fiat‑backed stablecoin. Stablecoins are crypto assets designed to keep a stable value, often linked to a fiat currency like the US dollar. Fiat‑backed models hold reserves in cash or short‑term assets and target 1 USDT ≈ 1 USD.
Networks: USDT exists on several blockchains as a leading crypto pegged to USD. Common ones include Ethereum (ERC‑20) and Tron (TRC‑20), plus others such as BNB Smart Chain, Polygon, and Solana. ERC‑20 is a token standard on Ethereum that defines how tokens work and interact with smart contracts.
Reserves: The issuer states that reserves back the tokens and publishes attestations. Users still face issuer and network risks like any digital asset.
Why USDT matters for businesses
USDT sits at the intersection of crypto and fiat. It can help businesses move value without price swings common to other crypto coins or tokens.
Key benefits of using USDT in business
- Stability: Pegged to USD, so invoices and balances are easier to track in $ terms.
- Speed: Transfers settle in minutes or seconds, depending on the chain.
- Reach: Crypto wallets are everywhere. Over 700 million people own crypto, so the audience is large.
- Lower costs: Crypto processing fees often sit at 1.5% or less, which is two to three times cheaper than many traditional methods. International bank wires can take up to 5 business days and charge extra fees.
- Liquidity: High volumes on exchanges and across DeFi make it easy to enter or exit positions.
For foundational concepts, see Payment QR code and Wallet address.
Is USDT secure?
Security depends on several layers:
- Issuer risk: You trust the issuer’s reserves and operations.
- Blockchain risk: Each chain has its own security model and fee market.
- Custody risk: How you store funds matters. Use reputable wallets, strong access control, and multi‑signature where available.
- Operational risk: Match the deposit network to the address network during payments to avoid loss.
What is USDT used for?
- Payments and settlements: Lock in invoice values in USD terms while sending crypto.
- Trading and hedging: Move into a dollar‑pegged asset between trades.
- Payroll and payouts: Pay teams or partners across borders at any time.
- Remittances: Send value worldwide with simple wallet‑to‑wallet transfers.
What is a USDT address?
A wallet address is where you receive funds on a given chain. The address format depends on the network:
- ERC‑20 USDT (Ethereum): Addresses typically start with 0x….
- TRC‑20 USDT (Tron): Addresses often start with T… .
Always select the same network on both sides of a transfer. Sending TRC‑20 USDT to an ERC‑20 address, or vice versa, can lead to losing your funds.
See more at: What is a wallet address?.
Is USDT the same as USD?
No. USD is a legal tender currency issued by the U.S. government. USDT is a private digital token that tracks USD’s value. Banks hold dollars in accounts. USDT lives in crypto wallets and travels on blockchains. Value can deviate from 1:1 during market stress and can potentially swing either direction.
Is USDT legal for businesses?
Crypto rules vary by country and jurisdiction. Many countries allow businesses to use crypto, but local licensing, tax, and reporting rules still apply.
For more, read our guide to KYC in crypto.
What blockchain is USDT on? What is USDT TRC‑20?
USDT exists on multiple chains. TRC‑20 is the Tron version of USDT. ERC‑20 is the Ethereum version. Fees and speeds differ by chain. Businesses often pick the network their customers use most, balancing cost, speed, and tooling.
Learn the ERC‑20 basics here: What is ERC‑20?
USDT vs Bitcoin vs USD for business
| Feature / Factor | USDT (Tether) | Bitcoin (BTC) | USD (Fiat) |
|---|---|---|---|
| Stability | Pegged 1:1 to USD, low price swings | High volatility | Fully stable, legal tender |
| Transaction speed | Seconds to minutes, varies by chain | Around 10 minutes on the BTC network | Domestic fast, cross‑border often 1-5 business days |
| Fees | Varies by chain; TRC‑20 often cheapest | Varies - higher during network congestion | Bank fees plus possible intermediaries |
| Global reach | Global, exists on many blockchains | Global, widely held | Limited by banking rails and countries |
| Adoption in business | Common in crypto commerce and payouts | Often held as an investment | Standard for all sectors |
| Volatility risk | Low | High | None, outside inflation |
| Integration options | Broad support via wallets, exchanges, APIs - check provider availability | Possible for payments, less common day‑to‑day | Standard bank connections or digital wallets |
| Compliance | Varies by provider and region | AML/KYC needed for regulated setups | Fully regulated banking |
| Common use case | Payments, settlements, hedging, payouts | Long‑term holding or investment thesis | Industry standard for business operations |
* Support for any specific asset depends on your payment provider.
Related reading in the Glossary
- Stablecoins – what they are and how they work.
- Wallet address – formats, safety, and best practices.
- ERC‑20 – the most common token standard on Ethereum.
- Payment QR code – a practical way to share payment details.
- KYC in crypto – compliance basics for businesses.
Other Terms from the Crypto Industry