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  "id": "what-is-usdt",
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  "collection": "stablecoins",
  "title": "What is USDT? Tether’s token and the meaning of its reserves",
  "description": "USDT targets one US dollar. Understand Tether’s reserve definition, token issuance, direct redemption conditions and the difference from exchange trading.",
  "aliases": [
    "Tether dollar",
    "USDt",
    "USD₮"
  ],
  "dates": {
    "published": "2026-10-02",
    "modified": "2026-10-02",
    "verified": "2026-10-02T15:09:00.630Z",
    "dataAsOf": "2026-10-02"
  },
  "authorship": {
    "publisher": "Degrees of Satoshi editorial project",
    "process": "AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied."
  },
  "quickAnswer": {
    "text": "USDT, also styled USD₮, is Tether’s dollar-referenced token. Tether represents it as backed by its reserves, whose definition extends beyond cash. Direct issuer services have eligibility, minimums and fees; those conditions differ from buying or selling USDT on an exchange. The dollar target does not guarantee every market quote.",
    "claimId": "what-is-usdt-quick-answer",
    "sourceIds": [
      "tether-terms",
      "tether-faq",
      "tether-fees",
      "stablecoin-definition"
    ]
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      "label": "Reference",
      "value": "USDT targets one US dollar.",
      "sourceIds": [
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      "id": "reference",
      "claimId": "what-is-usdt-fact-reference"
    },
    {
      "label": "Reserve definition",
      "value": "Tether’s reserve description includes more than bank cash.",
      "sourceIds": [
        "tether-terms",
        "tether-faq"
      ],
      "id": "reserve-definition",
      "claimId": "what-is-usdt-fact-reserve-definition"
    },
    {
      "label": "Service access",
      "value": "Direct issuer redemption is subject to eligibility, minimums and fees.",
      "sourceIds": [
        "tether-terms",
        "tether-fees"
      ],
      "id": "service-access",
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  ],
  "prerequisites": [
    "cash-backed-stablecoins",
    "stablecoin-reserve-reports"
  ],
  "sections": [
    {
      "id": "issuance",
      "heading": "Authorized tokens and circulating tokens differ",
      "sourceIds": [
        "tether-faq"
      ],
      "paragraphs": [
        "Tether’s FAQ distinguishes tokens created and held in its treasury from tokens issued into circulation. A large authorization transaction therefore cannot be interpreted as a customer purchase without examining the subsequent issuance and the issuer’s accounting definitions.",
        "This distinction matters when reading supply charts or transaction alerts. Name whether a figure measures authorized tokens, circulating tokens on one chain or an aggregate across networks. A transfer between treasury and a customer is a different event from a trade between two existing holders."
      ]
    },
    {
      "id": "backing",
      "heading": "Use the actual reserve categories",
      "sourceIds": [
        "tether-terms",
        "tether-faq"
      ],
      "paragraphs": [
        "Tether describes reserves that include traditional currency, cash equivalents and other assets, including certain receivables. “One dollar referenced” therefore should not be rewritten as “one physical dollar held in a bank for this token.” Review the relevant reserve report’s composition, date and scope.",
        "The terms and FAQ are evidence of Tether’s stated arrangement, not an independent audit performed by this encyclopedia. This entry intentionally avoids a current reserve total or market ranking. Those changing values would need their own dated observation and verification."
      ]
    },
    {
      "id": "redeeming",
      "heading": "The issuer route is not an exchange sale",
      "sourceIds": [
        "tether-terms",
        "tether-fees"
      ],
      "paragraphs": [
        "As accessed on 2 October 2026, Tether’s fee page lists a $100,000 minimum direct acquisition or redemption and a redemption fee of the greater of $1,000 or 0.1%. Its service terms impose customer and jurisdictional restrictions. These facts explain why a small holder may interact with intermediaries instead of the issuer.",
        "An exchange may quote its own price, minimum and withdrawal fee. That is the exchange’s service, not evidence that Tether offers those same terms. For a complete exit description, specify the token network, intermediary if any, quoted output and settlement route, and check the current documents."
      ]
    }
  ],
  "faq": [
    {
      "question": "Is USDT the same as a US dollar bank account?",
      "answer": "No. It is a token under an issuer arrangement, with separate service terms and a reserve definition that extends beyond cash.",
      "sourceIds": [
        "tether-terms"
      ]
    },
    {
      "question": "Does a treasury authorization prove new customer demand?",
      "answer": "No. Tether distinguishes authorized but unissued treasury tokens from tokens circulating outside its treasury.",
      "sourceIds": [
        "tether-faq"
      ]
    }
  ],
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      "statement": "USDT, also styled USD₮, is Tether’s dollar-referenced token. Tether represents it as backed by its reserves, whose definition extends beyond cash. Direct issuer services have eligibility, minimums and fees; those conditions differ from buying or selling USDT on an exchange. The dollar target does not guarantee every market quote.",
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        "notes": [
          "Tether terms reserve definition extends beyond cash; FAQ separates authorized-but-unissued treasury inventory from circulation.",
          "Fee page independently confirms dated direct-service $100k minimum and max($1k,0.1%) redemption fee; no exchange-equivalence or current ranking asserted."
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      "label": "SEC Division of Corporation Finance: Statement on Stablecoins",
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      "url": "https://www.sec.gov/newsroom/speeches-statements/statement-stablecoins-040425",
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  "related": {
    "articles": [
      "stablecoin-reserve-reports",
      "stablecoin-minting-redemption-eligibility",
      "what-is-usdc",
      "stablecoin-freezes-issuer-control",
      "usdc-vs-usdt"
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    "dossiers": [],
    "wallets": []
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  "revisionHistory": [
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      "kind": "published",
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  "citation": "Degrees of Satoshi editorial project. “What is USDT? Tether’s token and the meaning of its reserves.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/what-is-usdt/"
}