Stablecoins in 2022: what’s USTD?

The most expensive cryptocurrency in the world appeared in 2009. However, cryptocurrencies gained the worldwide fame only a few years ago, when the rate of Bitcoin cost about 20 thousand dollars. Three years later, an initiative to create a stable cryptocurrency and link its rate to a traditional asset appeared. The main feature of the project was to provide virtual coins with fiat currency. That’s how the first stablecoin, called «Tether», was created. It was backed by the US dollar, and now it’s known under abbreviation «USDT».

You can buy usdt with mastercard or visa on cryptocurrency exchanges. This is the most reliable and secure way to get the cryptocurrency on the Internet.

The operating principle of USDT stablecoin

The company’s documents state that the token circulation process consists of the following stages:

  1. The user deposits fiat funds to the Tether account.
  2. The company issues tokens (1 USD = 1 USDT).
  3. The company sends USDT to the client’s account in the equivalent of the amount of deposited dollars.
  4. The user carries out the necessary frauds with tokens (exchange, transfer) and then returns USDT to the deposit.
  5. The company automatically burns the returned tokens and transfers real dollars to the user.

Initially, the company announced the full provision of all tokens with American dollars, which caused some doubts among customers. A couple of years later, the developers decided to add other assets to the stablecoin. Now, the cryptocurrency is 70% supported by the dollar.

Advantages of the USDT stablecoin

Despite the presence of criticism and suspicions about this project, these following advantages can be identified:

  • stable exchange rate;
  • high liquidity;
  • availability on different blockchains;
  • ease of calculations;
  • availability of reports on the website.

Among the disadvantages, users mainly highlight the lack of independent audits and centralization.

Types of Tether

After the success of USDT, the company released other stablecoins, including:

  1. Eurocoin. The coin is backed by euro.
  2. CNHT. It’s based on the Chinese yuan.
  3. XAUT. This stablecoin is backed by gold.

All these options are available for purchase now, but they aren’t in great demand among users. Now stablecoin is widely accepted not only by crypto services, but also by platforms that don’t have the ability to accept payments in various national currencies. The platform is actively developing every day and has great prospects for the future.