USDT, also known as Tether, is a stablecoin widely used in the world of digital currencies. Stablecoins are a type of digital currency aimed at reducing the extreme volatility that can occur with other digital currencies like Bitcoin and Ethereum. The fundamental idea behind stablecoins is to peg their value to a stable asset such as fiat currencies, and in the case of USDT, its value is tied to the US dollar at a 1:1 ratio. This means that 1 USDT is always equivalent to 1 US dollar, ensuring relative stability and a fixed value compared to other digital currencies.