What is USDT?

USDT (Tether) is a stablecoin pegged 1:1 to the US dollar, designed to maintain a stable $1 value. Launched in 2014 by Tether Limited, USDT is backed by reserves including cash, Treasury bills, and cash equivalents. It operates across multiple blockchains including Ethereum, Tron, and Solana.

Key features of USDT

• Largest stablecoin: USDT holds 70% of the global stablecoin market with $187 billion market cap
• Multi-chain availability: Works across 10+ blockchains including Ethereum, Tron, Solana, and Polygon
• High liquidity: Processes over $700 billion in monthly transaction volume
• Reserve-backed: Claims 1:1 backing with US dollars and dollar-equivalent assets
• Trading pairs: Most widely used stablecoin for cryptocurrency trading on exchanges
• Cross-border payments: Enables fast, low-cost international transfers without banks

USDT statistics for 2026

USDT dominates the stablecoin market with significant adoption:

• 534 million users worldwide as of Q4 2025 according to Tether reporting
• $187.3 billion market capitalization in Q4 2025 per Tether's quarterly report
• 70% market share of the global stablecoin market per CoinLaw analysis
• $703 billion average monthly volume processed between June 2024-June 2025 per Polygon data
• 139.1 million on-chain holders as of Q4 2025 according to Tether
• 24.8 million average monthly active wallets in Q4 2025 per Tether reporting
• 45% of global USDT volume originates from Asia in Q1 2025 according to CoinLaw statistics
• 60.8 billion USDT on Tron, 51 billion USDT on Ethereum per Social Capital Markets

How USDT maintains its value

USDT stays close to $1 through a reserve system where Tether Limited holds backing assets.

When someone wants USDT, they deposit US dollars with Tether Limited. The company then creates new USDT tokens equal to the dollars deposited. When someone redeems USDT for dollars, Tether destroys those tokens and returns the equivalent dollars.

This mint-and-burn process controls USDT supply based on demand. More USDT gets created when demand increases. Tokens get destroyed when people redeem them for dollars.

Tether publishes quarterly reports showing what assets back USDT. According to company disclosures, reserves include cash, short-term US Treasury bills, money market funds, and other highly liquid assets. Over 85% of reserves consist of cash and cash equivalents.

The system relies on confidence that Tether actually holds enough reserves to back every token. Unlike some stablecoins that use smart contracts and algorithms, USDT depends on Tether Limited's centralized management of reserves.

Where USDT is used

USDT serves several purposes across cryptocurrency markets and payment systems:

1. Trading pairs: Most cryptocurrency exchanges offer trading pairs with USDT. Traders move funds into USDT to exit volatile positions without converting back to traditional currency through banks.
2. Cross-border payments: Businesses use USDT to pay suppliers in other countries. Transfers settle in minutes rather than days and cost less than traditional wire transfers. Due explains more about how to pay with USDT in international transactions.
3. Remittances: People working abroad send USDT home to family members. Recipients can hold USDT as digital dollars or convert it to local currency. This avoids high fees charged by traditional remittance services.
4. Store of value: In countries experiencing high inflation, people convert local currency to USDT to preserve purchasing power. USDT acts as an accessible digital dollar for those with limited access to traditional banking.
5. DeFi applications: Decentralized finance platforms accept USDT for lending, borrowing, and earning interest. Users can deposit USDT into protocols to generate yield or borrow against it as collateral.
6. Payment acceptance: Some merchants accept USDT directly for goods and services, particularly in regions where cryptocurrency adoption is high or traditional payment systems are unreliable.

For a detailed comparison of how USDT stacks up against other stablecoins, see Due's analysis of USDT vs USDC.

USDT on different blockchains

USDT operates on 13 different blockchains, each offering distinct advantages for specific use cases.

• Tron hosts 60.8 billion USDT, the largest deployment of any chain. Transaction costs range from $0.0002 to $0.01, making Tron the preferred network for cross-border remittances and peer-to-peer payments in emerging markets. Tron processes 49% of all USDT on-chain activity and handles the majority of high-frequency, low-value transfers across Asia, Africa, and Latin America.
• Ethereum holds 51 billion USDT and serves as the foundation for institutional adoption. DeFi protocols on Ethereum use USDT for lending, trading, and liquidity provision. Transaction costs average $0.56, higher than other chains but acceptable for large-value transfers where Ethereum's security and decentralization matter most. Major regulated issuers including BlackRock, PayPal, and Ripple launched their stablecoins on Ethereum first, establishing it as the trusted layer for financial institutions.
• BNB Chain (BSC) provides fast, low-cost transactions at $0.0021 per transfer. BSC integrates tightly with Binance's exchange infrastructure and serves users seeking efficiency without Ethereum's high fees. The network handles significant USDT volume for trading and DeFi applications.
• Solana hosts 2.2 billion USDT with transaction costs between $0.001 and $0.10. Sub-second finality makes Solana ideal for high-speed payments and settlement. Institutional payment processors including Visa expanded to Solana for real-time USDT settlement, processing over $10 billion daily across payment applications.
• Polygon holds 3.7 billion USDT with extremely low costs of $0.0002 per transaction. Polygon's Ethereum compatibility allows developers to build applications that access Ethereum's ecosystem while avoiding high gas fees. USDT on Polygon powers consumer payment applications and micropayment systems.
• Avalanche and Arbitrum each hold over $1.1 billion in USDT, primarily used in DeFi protocols. Both networks offer faster, cheaper alternatives to Ethereum mainnet while maintaining Ethereum compatibility for developers.
• TON (The Open Network) charges $0.0427 per transaction and focuses on real-time payment use cases. TON's integration with Telegram provides direct access to hundreds of millions of messaging app users.
• Layer 2 networks including Optimism, Base, and others account for 9.3% of total USDT volume. These networks offer Ethereum's security with significantly lower costs, making them attractive for applications requiring frequent transactions.

According to Tether CEO Paolo Ardoino, USDT transactions generate 40% of all blockchain fees across these nine major networks, demonstrating its role as the primary economic driver of blockchain usage.

Users cannot directly move USDT between blockchains. Moving USDT from Ethereum to Tron requires using a bridge service or exchanging through a platform that supports both networks. Each blockchain version of USDT is a separate token, though all maintain the same $1 peg and backing.

For a detailed comparison of how USDT stacks up against other stablecoins, see Due's analysis of USDT vs USDC.