USDT, a stablecoin, is pegged to the US dollar, maintaining its value at a 1:1 ratio. This stability is achieved through Tether Limited’s unique collateral system, which ensures that each USDT token is backed by an equivalent or greater amount in the company’s reserves.
The process of issuing new USDT stablecoins is carried out through fiat conversion. Legal entities wishing to issue stablecoins must undergo a registration process with Tether and meet strict client verification requirements (KYC). After this, to issue USDT, they transfer fiat funds to a designated bank account provided by Tether. The company then charges a fee and transfers the corresponding amount of USDT tokens to the buyer’s account.
This model provides stability and transparency in the issuance and circulation of USDT, reinforcing the trust of users and investors in this financial instrument.
