Origin

USDT is a cryptocurrency, also known as a stable coin, whose value is generally pegged to the U.S. dollar. USDT was issued in 2014 by a company called Tether to provide stable value to reduce cryptocurrency volatility. USDT is powered by blockchain technology and can be bought and sold on cryptocurrency exchanges. Tether claims that each USDT represents the value of one U.S. dollar, and the value stability of USDT is achieved by pegging each USDT to the U.S. dollar. This means that when a person purchases 1 USDT, he or she is actually purchasing a value equal to 1 U.S. Dollar (USD). USDT's value is relatively stable, so it is often used as a trading medium on cryptocurrency trading platforms. In addition, USDT has a very large trading volume in the cryptocurrency trading market and is one of the most commonly used stablecoins in the cryptocurrency market.

Question

Since the value of USDT is relatively stable, many people choose to use it as a stable currency for transactions or use it to purchase other cryptocurrencies, as USDT is generally less volatile than other cryptocurrencies. However, some people have questioned whether the assets supporting USDT actually exist, especially whether Tether has enough reserves to support the value of USDT. Some people believe that Tether lacks enough assets such as US dollars to support USDT, and doubt Tether's transparency and reliability. These controversies triggered a crisis of market confidence in USDT. In addition, USDT has also been accused of price manipulation in the market due to its high correlation with Bitcoin's price movements. Nonetheless, Tether has always emphasized the authenticity of its underlying assets and the stability of USDT. Tether publishes monthly reports on supporting assets to prove that the value of USDT is supported. These measures will help increase market confidence in USDT. USDT is also supported and adopted by many cryptocurrency exchanges, making it an integral part of the cryptocurrency market. In addition, the ease of use and liquidity of USDT are also one of the reasons for its popularity. Overall, despite the controversies and doubts USDT has faced, its importance and stability in the cryptocurrency market remain, becoming an indispensable tool for many investors and traders.

Risk

USDT is a stable currency whose value is generally pegged to the U.S. dollar and is issued by Tether. Although USDT is widely used in the cryptocurrency market, its security has always been the focus of attention. Below we will conduct some point of view analysis on the security of USDT.

1. Reserve issues

The main issue with the security of USDT is the reserve issue. Reserves refer to the U.S. dollar reserves held by Tether to support the value of USDT. However, some question whether Tether has enough U.S. dollar reserves to support the value of USDT. If the Tether company is unable to redeem the value of USDT, then the value of USDT will collapse, thus affecting the stability of the entire cryptocurrency market. Tether once claimed that its reserves corresponded one-to-one with the issuance of USDT, but this has never been verified by an independent agency. In addition, Tether has been accused of using USDT to purchase Bitcoin, thus affecting the prices of USDT and Bitcoin. This behavior was considered price manipulation of the market, further damaging confidence in USDT.

2. Regulatory issues

The security of USDT is also affected by regulatory issues. Since the legal and regulatory environment of the cryptocurrency market has not yet fully matured, regulatory issues with USDT have persisted. There are also some problems with Tether’s own operations, such as a lack of transparency and compliance. In addition, the U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Tether, accusing the company of issuing securities without registration. This lawsuit may have a negative impact on the development of USDT, further damaging the confidence and stability of USDT.

3. Technical risks

The security of USDT is also affected by technical risks. USDT is issued based on blockchain technology, so there are risks related to blockchain technology. For example, USDT may be affected by 51% attacks, double payments and other attack methods. In addition, Tether is at risk of being attacked by hackers. If the hacker attack is successful, the reserves held by Tether may be stolen, thus affecting the value and stability of USDT.

iGaming

USDT has a close relationship with the iGaming industry. The iGaming industry has always been subject to strict regulatory and legal restrictions, making it difficult to conduct transactions and payments through traditional financial institutions. The stability, convenience and liquidity of cryptocurrency are among the reasons for its popularity. In the iGaming market, USDT is one of the most commonly used stable coins because it has the following advantages:

1. Stability:

The value of USDT is stable and is often used as a trading medium on iGaming platforms. Many people use USDT to convert the value of their cryptocurrency into a stable value, thereby reducing the volatility of the cryptocurrency market. This conversion can make it easier for people to trade in the cryptocurrency market, while also reducing people's risk to the cryptocurrency market.

2. Convenience and circulation:

USDT can be transferred quickly around the world, and the transfer fee is low. Users can transfer funds to anywhere in a short time. This makes it easier for users of online gambling platforms to make deposits and withdrawals. Additionally, because USDT is widely used on cryptocurrency exchanges, it is easy to obtain.

3. Anonymity:

Due to the anonymity of USDT, users can conduct transactions through USDT without revealing sensitive information such as personal identity. This makes it easier for users of iGaming platforms to remain anonymous, thereby reducing the risk of attack. In addition, since USDT is pegged to the U.S. dollar, stable currency conversion can be performed between different countries and regions. This makes USDT a very convenient cross-border transfer tool. Since USDT is issued based on blockchain technology, the transfer speed is usually faster than traditional transfer methods.

Other Apps

1. Other cryptocurrency transactions:

USDT is widely used in cryptocurrency exchanges. Users can use USDT to purchase, trade, transfer and other operations, and due to its stability, many exchanges support the use of USDT for transactions. USDT can be used to purchase other cryptocurrencies such as Bitcoin, Ethereum, etc. In addition, USDT can also be used to conduct transactions between cryptocurrencies, such as converting Bitcoin to Ethereum, etc.

2. Lifestyle shopping payment:

Some online merchants and retailers have also begun to accept USDT as a method of cryptocurrency payment. Users can use USDT to purchase goods or services, which can reduce reliance on legal currency.

3. As a store of value:

Due to the stable value of USDT, it can serve as a cryptocurrency store of value. Many people use USDT to convert the value of their cryptocurrency into a stable value, thereby reducing the volatility of the cryptocurrency market. This conversion can make it easier for people to trade in the cryptocurrency market, while also reducing people's risk to the cryptocurrency market.

4. Cross-border transfer:

Because the value of USDT is pegged to the U.S. dollar, it allows for stable currency conversion between different countries and regions. This makes USDT a very convenient cross-border transfer tool. Since USDT is issued based on blockchain technology, the transfer speed is usually faster than traditional transfer methods.

5. Money laundering tools:

USDT is considered to be a possible money laundering risk. Because USDT transactions are based on blockchain technology, this technology is essentially anonymous and allows users to remain unidentified. In addition, USDT can be traded globally, which may allow criminals to use USDT for cross-border fund transfers, money laundering and other illegal activities. However, it should be noted that USDT itself is not an illegal cryptocurrency, but a stable currency. Tether claims that they have certain anti-money laundering measures, such as implementing a KYT (Know Your Transaction) program to ensure the legality and traceability of transactions. In addition, Tether is constantly improving its anti-money laundering and counter-terrorist financing measures to maintain the legitimacy and credibility of its stablecoins. Overall, USDT’s money laundering risks are also similar to other cryptocurrencies.

National policy

Currently, most countries in the world do not explicitly ban the use of USDT, but some countries and regions have put forward some regulatory requirements for USDT and other stable currencies, such as:

1. Mainland China:

China has strictly regulated cryptocurrencies over the past few years, including the use of USDT and other stablecoins. In May 2021, the People's Bank of China (China's central bank) issued a statement announcing a ban on financial institutions and payment institutions from engaging in cryptocurrency-related businesses, including stablecoins.

2. India:

The Indian government has banned cryptocurrencies. In July 2019, a draft law drawn up by a high-level government panel in India banned all forms of private cryptocurrencies, recommending fines of up to 250 million rupees and imprisonment of up to 10 years for anyone engaging in such transactions. In March 2021, Indian government officials stated that India planned to legislate to ban cryptocurrency and punish trading and even holding cryptocurrency. The new law will give cryptocurrency holders six months to liquidate such assets.

3. United States:

The U.S. Securities and Exchange Commission (SEC) has been regulating cryptocurrencies and has put forward some regulations and requirements for certain stablecoins.

4. Egypt:

Egypt’s Central Bank and Banking System Law (enacted by Law No. 194 of 2020) prohibits the issuance, trading or promotion of cryptocurrencies, the creation or operation of trading platforms or related activities,” the CBE statement read. “Those who violate this provision will be Imprisonment and a fine of not less than 1 million pounds and not more than 10 million Egyptian pounds [$516,340], or either of these two penalties. "

Summary

According to a survey by the World Economic Forum Davos, by 2027, 10% of global GDP will be stored on the blockchain. The top three cryptocurrencies by market capitalization include Bitcoin BTC, Ethereum ETH and Tether USDT. As a stable currency, USDT has its own value pegged to the U.S. dollar. USDT enables stable currency conversion between different countries and regions, and transfer speeds are often faster than traditional methods.

However, because USDT is able to be traded globally, it has also been questioned that it may be used to conduct illegal activities, such as cross-border fund transfers and money laundering. Because its transactions are based on anonymous blockchain technology, users can remain anonymous and transactions are not easily traceable. In addition, USDT is also closely related to the iGaming industry.

According to the analysis of TC-GAMING's big data database, as of 2023, many iGaming platforms have provided players with USDT payment. Because using USDT can bypass the supervision of traditional financial institutions and the transaction speed is very fast, it is very convenient for players. Due to the anonymity of USDT, most players also use USDT for betting to hide their identities and transaction records. Among them, USDT is the most popular payment method in the Vietnamese iGaming market. As the iGaming market in Southeast Asia develops, the number of users of USDT is also growing. A 2022 report from Chainalysis pointed out that Vietnam is one of the countries with the highest cryptocurrency adoption rate in the world, which shows that cryptocurrency transactions are very mature and popular in Vietnam.

Overall, as a stable currency, USDT’s stable value and high liquidity make its future application prospects quite broad. It can be said that the emergence of cryptocurrency has happened to solve the payment problems that have been troubled by the iGaming industry. As the popularity of USDT increases, USDT will eventually become the mainstream payment channel in the iGaming market.