Tether (USDT): Is it safe to buy and what is its purpose?
We take a closer look at the Tether token, or USDT, in this second article of our four-part ‘Stablecoin Series’.
What is Tether and how did it come about?
Tether, the native digital token of the Tether network, belongs to a class of cryptocurrencies called stablecoins.
Stablecoins, unlike other cryptocurrencies like BTC and ETH, are digital tokens that are pegged to a fiat currency. This makes them less susceptible to wild price swings, and hence, more “stable”.
In Tether’s case, each token is pegged to one US Dollar on a one-to-one ratio. This explains its symbol ‘USDT’.
Tether has the distinction of being the first currency-pegged cryptocurrency ever created, back in 2014.
Tether, according to a whitepaper by the Tether Network, was borne from complaints that mainstream cryptocurrencies like bitcoin were prone to volatile price swings, inadequate mass-market understanding of the technology, and insufficient ease-of-use for nontechnical users.
What can you do with USDT?
There are many things you can do with USDT.
USDT has been used since its launch as a way of on-ramping (entering) into the crypto market.
Many investors use USDT to purchase other cryptocurrencies like BTC and ETH, due to the aforementioned price stability, as well as the fact that transaction fees are lower when converting fiat to USDT and other stablecoins (and vice versa), versus converting fiat to other cryptos directly.
Increasingly, more individuals are now using USDT to generate even more crypto assets via a method known popularly as staking. Staking with USDT typically involves USDT holders committing and storing their USDT with crypto financial services platforms like Matrixport for a period of time, following which they will earn rewards in the form of BTC or ETH.
This is no different than in traditional finance, where an individual deposits money with a bank, then earns an interest after the scheme matures.
This simple approach is commonly known as Fixed Deposit or Fixed Income, and is just one of the many ways USDT holders can leverage and grow the value of their portfolio.
On the Matrixport app, you will find this and many other easy-to-use, interest-earning products that have been meticulously designed and created for all types of investment goals and risk appetites.
How can I buy Tether?
You can buy Tether using either “Credit Card” or “Bank Wire Transfer” on the Matrixport app.
More than 20 fiat currencies are currently supported via the credit card option (Visa or Mastercard), including USD, EUR, HKD, SGD, TWD, RUB, GBP, JYP, CAD, AUD, and KRW.
Since 20 November 2021, our app also offers Banxa as a payment channel. To celebrate this partnership, we are now offering 5 USDT to each user as a reward for their first credit card purchase. Terms and conditions apply.
Wire transfer allows you to purchase USDT through your fiat USD bank account via telegraphic transfer (international wire).
Do note that this method is not applicable for users in Mainland China, United States and other regions.
Simply fill in your bank account details after selecting the option as seen in the image below.