Is USDT Safe?

The world of cryptocurrency is quite diverse, but USDT has become a real game-changer in this sphere. It’s one of the most popular stablecoins among all the variety of crypto tokens we’re used to. Due to its vital advantages, USDT occupies a leading position in the market but what about its security issue? Let’s explain this question in detail!

What Is USDT?

As we’ve already mentioned, USDT, or it’s also called Tether, is the most widespread stablecoin among not only cryptocurrency beginners but advanced users, too. It’s pegged to the value of the US dollar in a 1:1 ratio, making it less volatile compared to other cryptocurrencies. So, this point also serves as its main advantage.

If you want to start integrating USDT into your personal or business needs with ease and convenience, first read the comprehensive analysis of the USDT token.

For most users who work with cryptocurrency even for the first day, this fact of linking a digital coin to fiat money value plays a massive role and speaks about a high level of security, but is this really so? Let’s see further!

Is USDT Safe?

The USDT token is owned by Tether Limited Inc., a huge company that totally controls both the entire issue of coins and their distribution. In addition, USDT is backed by Tether’s USD reserves. So, these facts may seem very convincing in terms of the transparency and safety of this stablecoin. However, nothing can be so simple, and these factors are the main cause of the problems.

Despite all the benefits of using USDT, its achievements and popularity on the crypto market, there is uncertainty about the transparency and reliability of Tether’s USD reserve. Particularly, concerns are devoted to the fact that Tether Limited Inc. may not have sufficient reserves to secure all issued USDT tokens, which may lead to loss of value or the inability to exchange tokens for fiat money.

A full dependence of Tether on its mother company, which controls all processes, has truly undermined the trust of the majority of users, and many of them believe that due to the lack of direct reporting and insufficient transparency of the company's work, the utilization of USDT carries great risks.

Nevertheless, USDT is considered safe to use on a daily basis as it’s perfect for making payments and storing value. Due to its binding to the dollar, USDT correspondingly is more convenient to manage and dispose of. So, most crypto-ethicists don’t even notice the general concern about the safety and transparency of the Tether Limited company's functioning.

What Is Safer: USDT Or USDC?

The eternal confrontation between USDT and USDC still haunts many interested in the topic. So, what stablecoin is safer, and why?

Despite significant similarities in the application, the type of cryptocurrency and the principles of operation, USDC is defined as a safer stablecoin than USDT. There are several reasons for this.

USD Coin, compared to Tether, has a more transparent support system and clarity, which is more attractive for users. Additionally, the CENTRE consortium, the company holding USDC, publishes monthly audit reports confirming the availability of full-dollar coverage, increasing the clients’ trust.

To be up to date it’s necessary to familiarize yourself with a more detailed comparison between USDC and USDT.

That’s all for now! We hope this article was handy for you, and now you’re better acquainted with the USDT security aspect. Manage your USDT wisely together with Cryptomus!