Tether (USDT) is the most important and most controversial stablecoin in cryptocurrency. With over $100 billion in circulation by 2024, USDT is the most traded cryptocurrency by volume — surpassing even Bitcoin — and serves as the de facto dollar of the crypto economy. Its story is one of relentless criticism, repeated near-death experiences, and improbable survival.
Launched in 2014 by Brock Pierce, Reeve Collins, and Craig Sellars (under the name “Realcoin”), Tether claimed each USDT was backed 1:1 by US dollars in reserve. The skeptics were loud from the start: was Tether actually fully backed? Were they printing unbacked USDT to manipulate Bitcoin’s price? Academic papers (notably by Griffin and Shams, 2020) argued that Tether issuance correlated suspiciously with Bitcoin price increases.
The controversies mounted. Tether’s relationship with Bitfinex exchange (sharing management) raised conflict-of-interest concerns. In 2021, Tether paid an $18.5 million fine to the New York Attorney General, which found that Tether’s reserves were not always fully backed and that the company had misrepresented the backing to customers. Reserve disclosures showed that backing included commercial paper, secured loans, and other assets — not just cash in a bank account.
Yet Tether survived every crisis. The Terra/UST collapse in May 2022 triggered billions in USDT redemptions — Tether processed them all, proving it could handle massive withdrawals. By 2024, Tether’s reserves included mostly US Treasury bills (the company reportedly earned over $6 billion in 2023 from Treasury yields — more than Goldman Sachs — with only ~100 employees). Tether became the largest single buyer of US Treasury bills in some periods. The company that crypto’s critics predicted would collapse became one of the most profitable in the industry. USDT’s dominance — particularly in emerging markets where it serves as a digital dollar — shows no sign of declining. Tether proved that in crypto, utility trumps reputation: as long as people need a stable, liquid, widely-accepted digital dollar, USDT will be used regardless of past controversies.
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