What is USDT and how does it work?

USDT (Tether) is a "stablecoin" - a cryptocurrency designed to maintain a stable value of $1 USD. USDT is generally described by its issuer as being designed to track the value of 1 USD, with reserves intended to support that peg.

USDT is designed to aim for a value near $1, and its issuer states that reserves are intended to help support that price target. The issuer (Tether) states that USDT is supported by reserves; the exact reserve composition and how it is managed can change over time. You can trade it on crypto exchanges and use it for transactions just like other cryptocurrencies.

Unlike more price-volatile cryptocurrencies (e.g., Bitcoin), USDT is intended to track roughly $1, so people often use it as a steadier unit of account for trading or transferring value.