What is USDT (Tether)? A Complete Guide on How to Buy, Its Uses, and Risks

In the world of cryptocurrencies, if you ask: “Which currency is the most traded and the most widely used?” The answer may surprise many — not Bitcoin (BTC), not Ethereum (ETH), but USDT (Tether, Tether USD)。

According to the latest statistics, USDT's 24-hour trading volume often exceeds billions of dollars, far higher than the sum of Bitcoin and Ethereum. It has become the main trading medium and store of value in the global cryptocurrency market.
Many beginners often ask: “USDT prices hardly go up and down, why do so many people use it?” “How is it different from Bitcoin?” “What is the use of buying USDT?”

This article will help you get started with a complete and smooth analysis of this largest stablecoin in the world by market capitalization, from the basics of USDT, how to buy it, its practical uses, to potential risks and advice for beginners.

1. What is USDT Tether?

USDT（Tether USD） It is one of a kind Stablecoin, its design core is a price-anchored dollar, which theoretically maintains 1 USDT ≈ 1 USD, the fluctuation is minimal.

Core Features

• Issuing company: Tether Limited (now Tether International, registered in the British Virgin Islands, modified)
• Time of birth: 2014 (original name Realcoin)
• Market capitalization: Approximately $1,870 billion (2026 data, the world's first stablecoin)
• prices: Stable around $1

Simply put, USDT is like “digital dollars on the blockchain,” allowing users to easily hold, transfer, and trade dollar value in cryptocurrencies, without the constraints of traditional banking systems.

Difference between USDT and Bitcoin

Many beginners can easily confuse the two, but they are completely different in essence:

conclusionsBitcoin is like “digital gold” for investing in pursuit of growth potential; USDT is like “digital dollars” for everyday trading, payments and hedging.

How USDT works

1. Users deposit dollars into Tether companies.
2. Tether issues the equivalent of USDT to the user's wallet.
3. Users can freely use USDT on the blockchain.
4. USDT can be redeemed for USD (1:1) if needed.

Tether claims equivalent reserve support of 1 USDT per issue.
Current reserves consist mainly of US Treasury bonds, cash equivalents, gold, bitcoin, etc. The report by the end of 2025 shows that total assets exceed liabilities and there is an excess buffer.
While there have been transparency controversies in the past (settled with New York State in 2021), reports verified by agencies such as BDO have been regularly published in recent years, and transparency has gradually improved.

Common Types of USDT (Blockchain Version)

USDT runs on multiple blockchains and varies widely in different version fees and speeds:

• USDT-TRC20 (Wavefield Tron): Minimum processing fee (about 1 USDT), fast, and most popular for daily transfers.
• USDT-ERC20 (Ethereum): Early version, suitable for large DeFi operations, but higher processing fees (5~50 USDT).
• USDT-BEP20 (Binance Smart Chain): Low handling fee (0.1～1 USDT), suitable for Binance ecosystem.

⚠️ Important Reminders: USDT on different blockchains cannot be directly exchanged, and the wrong network leads to permanent loss of assets! Be sure to confirm the version accepted by the other party before making a transfer.

Second, is USDT a virtual currency?

Yes, USDT belongs to cryptocurrency (virtual currency) because it is based on blockchain technology, can be traded on exchanges, supports peer-to-peer transfers, and uses crypto protection.

But it is very special:

• The price is highly stable, unlike Bitcoin going up and down.
• Issuance and management of reserves by centralized companies.
• The main purpose is not to add value to investments, but to serve as a “bridge” connecting the fiat currency and the crypto world.

USDT Belongs to French mortgage-backed stablecoins(Fiat-Collateralized Stablecoin), with lower risk compared to other types:

• French mortgage type (e.g. USDT, USDC): Backed by assets such as USD, most stable.
• Cryptocurrency collateral type (such as DAI): Over-collateralized other crypto assets, decentralized but highly volatile.
• Algorithm type (such as a crashed UST): The risk is highest.

3. How to buy USDT? (Referral method for beginners in Taiwan)

Method 1: Buy with Taiwan Dollar on a legitimate exchange (recommended for beginners)

1. SELECT A COMPLIANT EXCHANGE: E.G. MAX（MAICoin）、BitoPro、HOYA BIT、ZONE Wallet Platforms that have completed HKMA's VASP-related registration or AML compliance (NTD deposit support, user-friendly interface).
2. Register an account and complete KYC (Upload ID, Face ID, Review Approx. Days).
3. Deposit in Taiwan Dollars from my bank account.
4. Purchases in the “USDT/TWD” trade pair are available after confirming the price and handling fee.

Beginner's Suggestions: Buy a small amount (such as NT$1,000—3,000) test process, buying spreads are usually 0.5～ 1%.

Method 2: Exchange with other cryptocurrencies

Those who already hold BTC or ETH can sell directly into USDT on the exchange, ideal for targeting profits or hedging.

Method 3: Off-market trading (OTC/P2P)

As with Binance P2P, the advantages are flexible payment methods, but the risk of fraud is high and is not recommended for beginners.

4. How to use USDT? Five practical uses

1. Avoiding Price Fluctuations (Hedge)Sell USDT when Bitcoin rises, lock in profits; wait for a pullback and buy it back. No deposit required to the bank and return to the market at any time.
2. As a trading mediumAlmost all exchanges use USDT as the main trading pair (e.g. BTC/USDT, ETH/USDT). Faster, cheaper, and universal worldwide than directly using fiat currency.
3. Cross-border payments and remittancesTraditional remittances take 3-5 days, the processing fee is 3~ 7%; USDT is completed in a few minutes and the processing fee is only 1~5 USDT. Ideal for cross-border ecommerce, freelancers, international students, or corporate invoicing.
4. Participate in DeFi to Earn
   • Provides liquidity mining: annualized yield of about 5~ 15%.
   • Earn interest on USDT loans: 3～ 8% annualized.
   • EXCHANGE MANAGEMENT PRODUCTS: ACCESS AND ACCESS, 3~ 6% ANNUALIZED.
5. Stable part of asset allocationExample combinations: 60% USDT (stable), 30% BTC (growth), 10% ETH (high risk). Reduces overall volatility while maintaining flexibility.

5. Risks and precautions of USDT

• Risk of uncoupling: A short-term deviation away from $1 may occur during extreme market panic (such as a drop to 0.95 in 2022), but generally recover quickly. Resolve: Don't panic sell, disperse your holdings of other stablecoins like USDC.
• Reserve Transparency: It has been questioned in the past, and now there is a BDO verification report that the reserve is dominated by US government debt and there is an excess buffer. But it is still recommended not to put all your funds in a single stablecoin.
• Regulatory Risks: National policies may change, affecting liquidity. It is recommended to choose a compliant exchange and keep an eye on the dynamics.
• Technical Risks: Wrong address or misselected blockchain cannot be undone. Be sure to test small amounts and check the network carefully.
• others: Avoid use for illegal purposes and keep transaction records.

6. USDT vs USDC (other stablecoin comparison)

suggests: Choose USDT for short-term trading with high liquidity requirements; long-term holding or considering compliance choose USDC. It is best to disperse the holdings to reduce risk.

7. USDT USAGE ADVICE FOR BEGINNERS

• Start with a small amount: Buy NT$1,000—3,000 first and get familiar with the whole process.
• Choosing a Legitimate Platform: Priority Taiwan compliant exchanges (such as MAX and MAICoin group-related platforms) ensure support for Taiwan deposits and customer support.
• Understand the purpose and buy again: Decide the amount for transactions, transfers, or DeFi, explicitly.
• Beware of Blockchain Choices: DAILY TRANSFER PRIORITY TRC20 (LOW HANDLING FEE); USE ERC20 WHEN SPECIFIED BY THE OTHER PARTY.
• Don't hold a single stablecoin for a long time: USDT is recommended to allocate no more than 30~ 40% of the asset, with the rest spread to other assets.
• Continuous learning: Follow market dynamics and regulatory changes.

summed

USDT is the world's largest stablecoin, with 1 USDT ≈ 1 USD, leading market capitalization and largest trading volume.
It is not used to “add value to investments” but to the “digital dollar” of the cryptocurrency world, the best tool for hedging, trading, cross-border payments and participation in DeFi.

Get started now: Download the Taiwan Legitimate Exchange App, buy the first USDT in Taiwan Dollars and experience its convenience in person.

[download app]

⚠️ Disclaimer: This article is for educational and informational purposes only and does not constitute any investment advice.
Cryptocurrencies involve risks, including off-hook, regulatory, technical, and reserve-related risks that may fluctuate in value.
Please carefully assess your financial situation and consult a professional advisor if necessary.