Tether USDt
Crypto Overview
Purpose and Utility
Tether (USDT) is a stablecoin cryptocurrency designed to maintain a 1:1 peg with the US Dollar. Its primary purpose is to provide a stable digital asset for crypto trading, remittances, and as a bridge between traditional finance and cryptocurrencies. Each USDT token is meant to be backed by equivalent reserves in US dollars and other assets.
Business Model
Tether's business model involves maintaining dollar reserves to back USDT tokens, earning revenue through fees on USDT issuance and redemptions. The company claims to maintain full reserves for all issued tokens, though the exact composition of these reserves has been a subject of discussion in the crypto community.
Real-World Adoption
USDT is the most widely used stablecoin in the cryptocurrency ecosystem, with a market capitalization exceeding $83 billion as of 2024. It is integrated into most major cryptocurrency exchanges and is actively used for trading, remittances, and international payments.
Platform Development
Tether operates on multiple blockchain platforms including Ethereum, Tron, and others, ensuring wide accessibility. The platform regularly updates its technology and has implemented various security measures to protect users.
Token Distribution
USDT tokens are created (minted) or destroyed (burned) based on market demand and user deposits/withdrawals. Unlike traditional cryptocurrencies, there is no fixed supply cap - the supply changes based on actual USD deposits and redemptions.
Revenue Model
The primary revenue streams come from legitimate business operations: issuance/redemption fees and returns on reserve assets. These activities do not involve interest-bearing mechanisms that would conflict with Islamic principles.
Crypto Impact
To assign a comfort level investing in Tether USDt from a halal perspective we need to determine whether it has a net positive or negative impact.
Towards this end, the table below is used to tally all the positive and negative considerations our members can think of related to Tether USDt.
If you don’t see something that should be listed, positive or negative, feel free to submit your own contribution using the button “Contribute”.
We will review your contribution for accuracy before publication.
Importantly, you can review listed contributions and vote on which one you think has the greatest impact, positive or negative.
You only have one vote per asset so use it wisely.
You can change your vote if you change your mind.