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<p>Tether is a popular stablecoin that achieves stability by being pegged to the US dollar. This cryptocurrency has been a game-changer since its entry into the DeFi ecosystem. However, many people are not aware of how it really works, and this article will remedy that.</p><p>Related: <a href="https://hodl.fm/uk-regulations-afolami-led" rel="noopener noreferrer nofollow">The United Kingdom to Regulate Stablecoins and Digital Assets Staking</a></p><h2 id="header-0">How Tether (USDT) Works</h2><p>Stablecoins are a type of cryptocurrency that is not volatile, which means their value does not change unexpectedly. The most common way that these digital coins achieve this stability is by being tied or pegged to something physical.</p><p>Tether USDT is one of the most popular coins in the stablecoins market. It achieves its stability by being pegged to the US dollar. This pegging system means that for every Tether coin, there is a US dollar (a real-world asset) in existence.</p><p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/5026774a25694e2aad865fadcf6e1d88.gif" />Source: <a href="https://giphy.com/explore/thats-not-how-it-works" rel="noopener noreferrer nofollow">Giphy</a></p><p>It also means that every movement the US dollar makes is reflected in USDT Tether. This pegging system is also why the price of Tether is always equal to the dollar. </p><h3 id="a-href-https-hodl-fm-how-tether-usdt-works-rel-noopener-noreferrer-nofollow-read-more-on-hodl-fm-a"><a href="https://hodl.fm/how-tether-usdt-works" rel="noopener noreferrer nofollow">READ MORE ON HODL.FM</a></h3>

Understanding Tether (USDT)

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