Tether (USDT) exerts a deep and multifaceted impact on the global cryptocurrency market, establishing itself as the largest stablecoin by volume and capitalization. Its main function is to act as a bridge between traditional fiat currencies, such as the US dollar, and the volatile universe of cryptocurrencies. By maintaining a 1:1 peg to the dollar, USDT offers traders and investors a refuge of stability during price fluctuations, allowing them to preserve the value of their assets without the need to convert to traditional fiat currency.
This stability is crucial for market liquidity. USDT is the most common trading pair for most cryptocurrencies, facilitating quick and efficient transactions on global exchanges. Without USDT, capital movement would be slower and more costly, negatively impacting the agility of trading.
Furthermore, USDT plays a fundamental role in the DeFi (Decentralized Finance) ecosystem, being widely used in lending, staking, and liquidity protocols. Its global presence is notable, with high adoption in regions like Asia and Europe, where it often serves as a substitute for the US dollar in economies with unstable local currencies. However, USDT also faces regulatory scrutiny and concerns regarding the transparency of its reserves, issues that could influence its credibility and, consequently, its influence in the global market.