USDT is a cryptocurrency asset issued on the Bitcoin blockchain via the Omni Layer Protocol. Each USDT unit is backed by a U.S Dollar held in the reserves of the Tether Limited and can be redeemed through the Tether Platform. USDT can be transferred, stored, spent, just like bitcoins or any other cryptocurrency, users can transact and store tethers with any Omni Layer enabled wallet like Ambisafe, Holy Transaction or Omni Wallet.
USDT and other Tether currencies were created to facilitate the transfer of national currencies, to provide users with a stable alternative to Bitcoin and to provide an alternative for exchange and wallet audits which are currently unreliable. USDT provides an alternative to Proof of Solvency methods by introducing a Proof of Reserves Process.
In the Tether Proof of Reserves system, the amount of USDT in circulations can be easily checked on the Bitcoin blockchain via the tools provided at Omnichest.info, while the corresponding total amount of USD held reserves is proved by publishing the bank balance and undergoing periodic audits by professionals.
The amount of USDT in circulation must always correspond to the amount of USD in the bank account used by Tether Limited to receive and send fiat currency to users who purchase/redeem tethers directly on the Tether Platform.
To prove that the amount of USD in the bank account is the same or more than the USDT in circulation, Tether Limited publishes the bank account balance on its website’s Transparency page. Professional auditors will regularly verify, sign, and publish the underlying bank balance and financial transfer statement.