Tether is a stablecoin that’s pegged to the U.S. Dollar and issued by Tether Limited.
With more than $30 billion dollars in market cap, Tether is the third most widely held digital asset behind bitcoin and ether and it’s the most traded crypto asset by daily volume, including on Kraken, where it is commonly used to transfer value between other tokens we support.
Tether Limited has the ability to increase circulating supply of Tether solely at its discretion and has been accused of using USDT to inflate the price of bitcoin during the 2017 bull run.
Tether has also faced controversy around its reserves. Tether originally claimed each one of its stablecoins was fully backed with USD in a 1:1 ratio but then later in a March 2019 court filing stated that Tether is backed by a basket of cash reserves, securities, bitcoin and liabilities owed to Tether.
While Tether hasn’t won everybody over – and probably never will – it remains an integral part of the digital asset infrastructure. It provides a key source of liquidity for investors as well as a hedge against market volatility. In spite of the controversies, Tether has proven to be a reliable medium for investors looking to move funds between different crypto assets.
Kraken fully supports all digital asset projects that meet its listing criteria and maintains that all individuals have the right to freely invest in any digital asset they wish.
Note: This article has been revised to more accurately reflect Kraken’s brand standards.