What is Tether (USDT)? The stablecoin explained: 182 billion tokens without EU authorisation

Tether is the largest stablecoin in the world: a token called USDT that is meant to track the value of one US dollar and is issued by a private company. On October 22, 2026, according to CoinGecko, around 182.8 billion USDT were in circulation, worth $182.7 billion in total. That puts Tether third in the crypto market behind Bitcoin and Ethereum.

For investors in Germany, though, the position shifted in the autumn of 2026. USDT holds no authorisation as an e-money token in the European Union, and the supervisors are drawing conclusions from that. What Tether is, what the dollar peg is supposed to be backed by, and what applies on authorised venues from January 2027 is set out in this article.

What Tether is: a dollar token without dollars in your account

A stablecoin is a cryptocurrency whose price is meant to be pegged to a fixed reference value, usually a state currency. Tether belongs to the most common design: the issuer takes in money, issues tokens against it and promises to redeem every token on demand. The peg therefore does not come from a formula in the program code, but from a company's promise and from traders who exploit every deviation.

The tokens are issued by Tether Operations, S.A. de C.V., which has moved its seat to El Salvador. Holding USDT therefore does not mean holding a dollar in a bank account, but holding a claim against this company, recorded as an entry on a blockchain. That distinction is the core of the whole subject: there is no deposit guarantee for it of the kind a current account has.

The same house issues further tokens, among them a gold-linked instrument and tokens on other currencies. In everyday usage, however, “Tether” almost always means USDT, the dollar token.

182 billion USDT in circulation: why the stablecoin ranks third

Market capitalisation tells only half the story. Turnover is more revealing: USDT accounted for roughly $60.2 billion of trading volume within 24 hours on October 22, 2026, against total crypto market volume of about $89.4 billion. Two out of every three dollars traded therefore run through this single token.

The reason lies in its function. At many venues around the world, trading is not done against the euro or the dollar but against USDT. The token is the unit of account of crypto trading, the place where balances wait between two positions, and often the only route by which money reaches an exchange at all. Anyone looking at prices in dollars is in truth frequently looking at prices in USDT.

That creates a dependency reaching beyond individual investors. Were USDT to lose its peg, it would affect not only its holders but price formation across wide parts of the market. It is precisely for that reason that regulators look at this token more closely than at any other.

The dollar peg: how issuance and redemption work

The process is about as simple as it gets. A vetted business client transfers money to the issuer and is credited with the same number of tokens, which are newly created. In reverse, the client submits tokens, they are destroyed, and the money comes back. Retail customers as a rule do not use this route; they buy and sell USDT on the market.

The price stays stable through the gap to those two prices. If USDT falls below a dollar on the market, it pays for a business client to buy cheaply and redeem at full value with the issuer. That mechanism works for as long as redemption genuinely remains open and is settled promptly.

Why $0.999 is not an error

USDT traded at $0.999256 on October 22, 2026, around 0.89 euros. Deviations of that order, in the per-mille range, are normal and reflect supply and demand at the venue in question. It becomes worth noting only when the price stays markedly below that level for hours: that is when the market doubts redemption.

What lies behind USDT: Tether's own figures on the reserve

On its transparency page the company states that all tokens are “100% backed by Tether's reserves” and that assets exceed liabilities. It publishes the circulating amounts there, along with regular reports on the composition of the reserve, which according to the house consists mainly of short-dated US government bonds and cash equivalents.

Two terms are worth telling apart. An attestation records what the holdings looked like on a given date. An annual audit goes further and assesses the accounting over an entire period. That Tether was able to present an unqualified audit opinion from a large firm for the first time is something we assessed on August 16, 2026 in Tether's KPMG audit.

Independently of that, one limit remains which no report makes disappear: the backing rests on statements and reviews by the issuer and its service providers. There is no state guarantee and no protection fund.

Eleven blockchains, one token: the network choice decides the fee and the arrival

USDT is not a network of its own but a token issued on other blockchains. CoinGecko lists it for at least eleven of them, among them Ethereum, Tron, Solana, Avalanche and The Open Network. The token is everywhere the same claim against the same issuer, but the entries sit in separate networks.

In practice that means this: send USDT over Tron to an address that accepts only Ethereum, and the balance is in all likelihood lost. Before any transfer, therefore, sender and recipient should be matched on the network. Costs also differ considerably; a transfer over Tron costs a fraction of what accrues on Ethereum.

Tether can freeze individual addresses: the clause in the small print

One property distinguishes USDT fundamentally from Bitcoin. The issuer can block individual addresses, so that the tokens sitting there can no longer be moved. This is used at the request of law enforcement, for instance after thefts, and on the basis of sanctions lists. The terms of use expressly reserve that decision to the company at its own discretion, which we broke down on October 8, 2026 in USDT frozen.

It can be judged in both directions. For law enforcement the freeze is an effective tool that does not exist with Bitcoin. For you as a holder it means that a central actor can decide on availability: a risk that lies in the design and cannot be removed by self-custody. How the large stablecoins differ on this point and on authorisation is shown in our stablecoin comparison.

USDT under MiCA: Tether has not applied for e-money token authorisation

Since the end of December 2024 the EU regulation on markets in crypto-assets, MiCA for short, also governs stablecoins. A token that tracks a single currency counts there as an e-money token, and anyone wanting to offer one publicly in the EU needs authorisation as an electronic money institution or a credit institution. That comes with requirements on the reserve, among them a substantial share held as deposits at banks in the EU.

Tether does not have that authorisation. The company has set itself against the requirements and has obtained no permission for USDT in the EU. The consequence showed up first at the trading venues: several European providers removed the token from trading for customers in the European Economic Area as early as 2025 and 2026. In Germany, BaFin oversees compliance with these rules.

The ESMA deadline of January 8, 2027: what happens on German trading venues

On October 8, 2026 the European securities regulator ESMA published a formal opinion that bars authorised crypto service providers in the EU from offering services around stablecoins which do not comply with MiCA. National supervisors are to wind down remaining holdings no later than three months after publication, which means by January 8, 2027. We documented the wording and the document's reference on the same day in ESMA's stablecoin deadline.

A ban on owning USDT does not follow from it. What falls away is the offering of authorised providers: buying more and continuing to trade on an EU platform come to an end, while selling, swapping and withdrawing to a wallet of your own stay open. How early an individual provider switches off is for that provider to decide; in comparable cases several houses did so well before the cut-off date.

So look through your provider's notices for whether and from when it switches USDT off, and plan the swap before the trading pair disappears. The regular alternative in the EU is authorised stablecoins; which provider carries them is set out in each exchange's product overviews.

The difference from USDC and EURC: authorisation rather than market share

USDC is the second-largest dollar stablecoin, EURC the best known on the euro. Both come from the US company Circle, which has obtained authorisation in the EU and offers its tokens accordingly as e-money tokens. In global trading volume they sit far behind USDT; in the EU they are on the safe side of regulation instead.

With the euro token a practical advantage comes on top: anyone who thinks and calculates in euros carries the exchange-rate risk as well with a dollar stablecoin. If the euro rises against the dollar, a balance in USDT loses value even though the dollar peg has worked perfectly.

What all three tokens have in common stays the same: behind each stands a company that has to hold the reserve and service redemption. Which other differences count before buying a cryptocurrency is gathered in which cryptocurrency to buy.

Tax on stablecoins: a swap into USDT is a sale

The tax office treats USDT like any other cryptocurrency, namely as an other asset within the meaning of Section 23 of the German Income Tax Act. From that follows the point that surprises most investors: whoever swaps Bitcoin for USDT has sold Bitcoin. If the purchase was less than a year ago, the gain is taxable, even though no euro has landed in the current account.

For the USDT itself, a swap back at the same price regularly produces no gain worth mentioning, because the value barely moves. What is usually relevant for tax is the exchange-rate result against the euro. You still have to record every step with date, amount and price, because the one-year period starts afresh for every token received. Where the reform debate on that period currently stands is something we track in the crypto holding period and the state of the reform.

What a price of $0.999 does not promise: the low at $0.57

A look at the price history puts the word “stable” in context. The all-time high of USDT is $1.32, the all-time low $0.572521, from the token's early years. There were later phases too in which the price slipped noticeably below a dollar amid doubts about the issuer and returned only after days.

A stablecoin is therefore not an instant-access savings account. It is a corporate promise with a market price, and that price reflects how far the market currently trusts the promise. For parking money briefly between two positions that is bearable; for storing larger amounts over months the question looks different.

USDT in Germany: from January 8, 2027 it is a one-way street

Tether solves a real problem of crypto trading and carries a risk for it that Bitcoin does not know: that of its issuer. In the EU the regulatory problem has been added since October 2026. Three steps put the position in order:

1. Establish your own holding and your provider. Look up how much USDT you hold and what your trading venue has announced about the deadline. Which exchanges accept German customers and what authorisation they hold is shown by the comparison of regulated crypto exchanges.
2. Reshuffle before the cut-off date, not after. As long as the trading pair runs, swapping into an authorised stablecoin or into euros is cheap; once it is switched off, only detours remain. The overview of providers is delivered by the stablecoin comparison.
3. Record every movement for tax. Every swap is a sale, and without a purchase record the tax office estimates. Tools that write this down automatically are found under crypto tax software.

(As of October 22, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)