If you have been looking at the values of cryptocurrencies, you might have encountered one strange currency which always stays at $1 USD — Tether. Well, this article explains why:
Tether is a cryptocurrency which is 100% backed by fiat currencies and currently supports US Dollars (USD), Euros (EUR), and soon Japanese Yen (JPY). They are represented as different currencies with a ₮ behind the names — USD₮, EUR₮, and JPY₮.
The value of 1 USD₮ is always equal to the price of 1 USD and the value of 1 EUR₮ is always equal to the price of 1 EUR. This is because the currency is 100% backed by the fiat currency assets the company holds. Similar to how banks used to hold gold in their vaults that money is pegged to in the pre-70s era.
Purchasing Tether based currencies can be done through the Tether exchange platform and it is through this platform that Tether based currencies can be cashed-out into fiat currencies.
Tether enables businesses including exchange, wallets, and payment processors, to easily integrate fiat currencies on blockchains. Some of the largest business in the digital currency world such as ShapeShift, Poloniex, and Bitfinex, have all integrated Tether.
The total supply of Tether is unlimited as it is always backed 100% by the amount of fiat currency the platform holds. For instance, if the platform holds 1 million USD, there will be a total supply of 1 million USD₮. Tether is built on top of the revolutionary and cryptographically secure open blockchain technology and adheres to strict security and global government laws and regulations.
Tether is a fully transparent company which publishes a timely record of all value held (fiat currencies) and transferred in and out of their reserve account. Tether currencies can be securely stored, sent, and received across the blockchain and are exchangeable for cash. Once someone exchanges Tether currencies into fiat currencies, the Tether currency will be destroyed to ensure that the total supply of Tether currencies match the total stored amount of fiat currencies.
This is the main reason why Tether is always valued at $1 USD. The currency is currently ranked at #21 in terms of its total market cap rank. For more information, visit the official website of Tether on: https://tether.to/
Originally published at www.eugenetay.com.