Why Tether is stable

All Tether tokens are pegged at 1-to-1 with a matching fiat currency (e.g., 1 USD₮ = 1 USD) and are backed 100% by Tether’s reserves . As a fully transparent company, we publish a daily record of our bank balances and the value of our reserves.

Tether is a cryptocurrency that is pegged to a given fiat currency, for example, the USD, as well as physical assets such as gold. Tether makes money from various fees, by issuing loans to other institutions, as well as through investments .

“If Tether collapsed, well then, it’s going to gut the whole crypto ecosystem ,” he warned. As far as the regulators are concerned, the size of Tether’s supposed dollar holdings is so big that it would be dangerous even assuming the dollars are real.

Some central Stablecoins, such as Tether, require a custodian to regulate the currency and then reserve a certain amount of collateral . Tether holds the US dollar in a bank account and the amount held must be equal to what they issue to maintain the order of the system. In this way, price fluctuations are prevented.