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Tether (USDT) is a fiat-pegged stablecoin that was initially built on top of Bitcoin via the Omni Layer Protocol. In September 2017, Tether announced they would be launching additional ERC-20 tokens for United States dollars on the Ethereum blockchain.
Each Tether issued into circulation is said to be backed by a one-to-one ratio with the equivalent amount of fiat currency held in a custodial account by Tether Limited, a Hong Kong-based company with close ties to the cryptocurrency exchange, Bitfinex.
Despite the controversy around the company's failure to provide a promised audit showing adequate reserves backing tether, as of April 2023, USDT is still the world's largest stablecoin by market cap and currently the third-largest cryptocurrency after BTC and ETH.