In the vast field of financial investment, stablecoins, as an important component of the digital currency world, are gradually showcasing their unique charm and influence. Among stablecoins, Tether is undoubtedly a shining star. Recently, Tether celebrated its tenth anniversary, which is not only a milestone worth celebrating but also an excellent opportunity to reflect on the past and look forward to the future.
1. A Decade of Outstanding Achievements
On October 7, Tether published an article celebrating the company's tenth anniversary. Since its establishment in 2014, Tether was the first to propose the concept of a digital currency pegged to the US dollar, USDT, which provided an unprecedented solution to the volatility of the cryptocurrency market.
Today, USDT has become the most widely used stablecoin globally, with a market capitalization nearing $120 billion, a figure that sufficiently demonstrates its dominant position in the market. Tether has not only achieved tremendous success in terms of market capitalization but also boasts impressive profitability. In the first half of this year, the company's net profit reached a historic high of $5.2 billion, with profits in the second quarter alone amounting to $1.3 billion.
Entering the third quarter, according to data from CryptoQuant, the liquidity of stablecoins grew to a record $169 billion by the end of September, marking a 31% increase since the beginning of the year. Tether's USDT holds a 71% share of the stablecoin market, while the second-ranked Circle's USDC accounts for only 21%. Notably, Tether's revenue for 2023 was $6.2 billion, surpassing the $5.5 billion revenue of major global investment firm BlackRock in the same year. It is worth noting that BlackRock has 20,000 employees, while Tether has only 100, highlighting Tether's efficiency and strength in the financial sector.
2. Advantages and Application Scenarios of USDT
(1) Basic Concept and Advantages of USDT
When talking about Tether, one cannot overlook USDT. USDT is a token based on the stable value of the US dollar (USD) launched by Tether, with a 1USDT = 1 USD exchange rate, allowing users to exchange USDT for USD at a 1:1 ratio at any time. Tether strictly adheres to a 1:1 reserve guarantee, meaning that for every USDT token issued, there is $1 in its bank account to back it. Users can check their funds on the Tether platform to ensure transparency. Users can obtain USDT by wiring USD to the bank account provided by Tether or by exchanging it on exchanges; when redeeming for USD, the reverse operation is performed, and users can also exchange USDT for Bitcoin on trading platforms.
As the largest stablecoin in the world, USDT has several significant advantages:
Price stability is the primary characteristic of USDT: it maintains a 1:1 peg with fiat currencies (such as the US dollar), making it an ideal choice for investors seeking stable value storage and exchange medium in the volatile cryptocurrency market. In a market environment full of uncertainties, USDT acts like a solid fortress, protecting investors from the impacts of price fluctuations.
USDT has a hedging function: The cryptocurrency market is like a turbulent sea, often experiencing significant volatility. In the storm of market corrections, USDT becomes a safe haven for investors due to its stability. When the prices of other digital currencies plummet, investors flock to USDT to avoid substantial asset depreciation.
USDT has high liquidity: It is traded on major global cryptocurrency exchanges, and this extensive market coverage allows users to easily trade and convert. Anytime and anywhere, investors can quickly exchange USDT for other digital currencies or fiat currencies, just like cruising smoothly on the highway of the financial market.
USDT also has widespread circulation: It is widely accepted and used on numerous cryptocurrency trading platforms, making it extremely convenient for trading, storing value, or as a tool for transferring funds. USDT is like a universal key that can open various doors in the cryptocurrency world, meeting the diverse needs of investors.
Thus, it is evident that USDT, as a digital currency born at the forefront of blockchain technology, cleverly integrates the global and decentralized characteristics of digital currencies with the stability and strong credit backing of fiat currencies.
(2) Application Scenarios of USDT
So, what are the uses of USDT, which has numerous advantages? What fields has it already ventured into, and what potential applications might it have in the future?
- Exchange Trading
USDT is one of the mainstream trading pairs in cryptocurrency exchanges. In this vibrant and innovative world of digital asset trading, USDT plays a crucial role. Users can trade digital assets like Bitcoin and Ethereum using USDT. It serves as a stable lighthouse, providing traders with a reliable value reference in the turbulent market, enabling them to conduct more robust trades amidst the market's ups and downs. Many well-known trading platforms, such as Binance, Huobi, OKX, and Coinbase, support fiat purchases of USDT, providing users with convenient trading access. Additionally, the new digital currency trading platform BiyaPay also supports digital currency trading, further enriching user choices.
- Value Storage and Transfer
The stability of USDT makes it an ideal choice for value storage. In certain countries, when the local currency faces depreciation pressure, people, like ships seeking a safe harbor, choose to convert their assets into USDT to preserve their value. USDT acts like a sturdy safe, providing a secure shelter for users' assets. At the same time, it can also be used as a tool for value transfer, especially in countries with restrictions on cryptocurrencies. With its stability, USDT cleverly avoids the risks brought by market fluctuations, providing users with an efficient and convenient asset protection method.
- Financial Services
USDT has also demonstrated unique charm in the financial services sector. In China, some financial institutions and investment platforms have opened the door for users to invest in USDT, allowing them to convert funds into USDT for storage and investment, like planting seeds of hope in a financial garden, enjoying relatively stable returns. USDT is also active on lending and staking platforms, where users can lend USDT to others, like lending fertile land for interest returns; or stake USDT, like mortgaging precious treasures to borrow other assets.
- Virtual Goods Trading
In the vast realm of the virtual world, USDT has also found its place. Some online games, virtual social platforms, and e-commerce platforms support the use of USDT for trading virtual goods. Users can use USDT to purchase virtual currencies, game equipment, e-books, and other virtual products, as if freely wandering in a virtual market, easily selecting their desired treasures, greatly enhancing the convenience of online shopping.
- Cross-Border Remittances
USDT can serve as a tool for cross-border remittances. Due to its value being pegged to the US dollar, it can save on currency conversion costs and time, improving payment efficiency and convenience. It is used as a tool for cross-border remittances, and compared to traditional methods, using USDT for remittances is more efficient and economical.
Apps for cross-border remittances using USDT already exist. For example, the recently popular multi-asset trading platform BiyaPay uses USDT as an intermediary to help users with remittances. Users only need to deposit USDT into BiyaPay and link their bank accounts to exchange it for various fiat currencies like USD and HKD for global remittances. Importantly, using BiyaPay for remittances allows for unlimited amounts; for instance, if you want to invest in US stocks, you can use BiyaPay to remit up to $5 million to Charles Schwab. This is something many other remittance platforms cannot achieve.
3. Summary and Outlook for Tether's Ten Years
In the past decade, Tether has achieved remarkable accomplishments. From a global perspective, it has over 350 million users worldwide, significantly promoting financial inclusion in emerging markets and making important contributions to the diversification of global financial markets.
In terms of cooperation with law enforcement, Tether has performed excellently. It has actively assisted over 180 law enforcement agencies in successfully recovering more than $1.8 billion related to illegal activities, playing a positive role in maintaining fairness and justice in the financial market.
In terms of liquidity, Tether has demonstrated strong capabilities. During the UST crisis in 2022, Tether processed $10 billion in redemptions within a week, a feat that fully proves its liquidity and reliability, instilling confidence in investors.
Tether is not content with merely being a stablecoin issuer; it is also actively expanding its business areas, launching projects such as Tether Data, Tether Finance, Tether Power, Tether Edu, and Tether Evo to enhance its influence in the financial sector.
Looking ahead to the next decade, Tether understands that while the company has made significant progress, challenges remain in regulatory transparency, scalability, and the practical utility of digital currencies. However, Tether harbors a grand vision, envisioning a world where digital currency payments are seamless, accessible, and inclusive for all. In the next decade, Tether will focus on enhancing global financial inclusion, expanding its token issuance, and actively promoting innovation in areas such as artificial intelligence, energy sustainability, and blockchain education.
In summary, Tether has written a brilliant chapter in the past decade, and in the next decade, it will continue to forge ahead, exploring more possibilities in the world of digital currencies and contributing more to the development of global financial markets. It is believed that with the joint efforts of Tether and the entire industry, digital currencies will usher in a broader development prospect, bringing more convenience and opportunities to people's lives.
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