Tether (USDT) is a type of stablecoin, a cryptocurrency that is pegged to the value of a fiat currency, in this case, the US Dollar (USD). Tether was launched in 2014 by a company called Tether Limited. It was originally built on the Bitcoin blockchain using the Omni Layer protocol but has since expanded to other blockchain networks, including Ethereum (as an ERC-20 token), Tron (as a TRC-20 token), and others.
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The primary purpose of Tether is to provide a cryptocurrency that maintains a stable value equivalent to one US dollar. This stability is intended to reduce the volatility often associated with other cryptocurrencies like Bitcoin or Ethereum. Tether achieves this by backing each USDT token with an equivalent amount of USD held in reserves.
Here is a brief timeline of key events in the history of Tether up until my last knowledge update in January 2022:
2014: Tether Limited is founded, and the USDT stablecoin is launched on the Bitcoin blockchain.
2015: Tether starts expanding to other blockchain networks, including the Omni Layer on Bitcoin.
2017: Tether faces scrutiny and questions regarding its claim of having sufficient USD reserves to back all issued USDT. The company hires a third-party law firm to conduct a financial audit but later dissolves its relationship with the auditing firm without a full audit being completed.
2018: Tether's parent company, iFinex, is subpoenaed by the U.S. Commodity Futures Trading Commission (CFTC) in connection with concerns about the lack of transparency and the backing of USDT.
2019: Tether admits that USDT is not 100% backed by cash reserves alone. Instead, it can also be backed by loans made to third parties.
2020: Tether becomes a major player in the decentralized finance (DeFi) space, as the demand for stablecoins increases.
2021: Tether reaches a settlement with the New York Attorney General's office regarding the investigation into the use of USDT and issues a $18.5 million fine. The settlement requires Tether to provide regular reporting on its reserves.