USDT on BNB Chain is a centralized stablecoin backed by USDT reserves custodied by Binance.
USDT is a large-cap asset with questionable collateral reserves. This asset depends on two centralized entities for custody services. USDT on BNB Chain is backed 1:1 by USDT reserves held with a licensed custodian (Paxos). USDT is fully redeemable for its USD reserves, providing an effective mechanism to retain the peg to $1. The asset has an uncapped supply but has inflation control or burn mechanisms in place.
USDT is a stablecoin that consistently trades within 10bps of its peg to USD, which makes it a great store of value.
USDT is a stablecoin that consistently trades within 10bps of its peg to USD, which makes it a great store of value. USDT is fully redeemable for its USD reserves, providing an effective mechanism to retain the peg to $1.
Binance-Peg BSC-USD has no dependencies.
USDT launched on the Ethereum mainnet in July 2014 by Brock Pierce, Craig Sellars and Reeve Collins. Tether is one of the earliest stablecoins created that pioneered the fiat-collaterlization model that is widely used today. Tether based out of Hong Kong is the sole entity responsible for creating and redeeming tokens as well as maintaining the 1:1 reserve backing.
USDT are backed 1:1 by USD reserves held with a licensed custodian (Tether). The process of minting USDT tokens requires a KYC registration process with Tether. After receiving approval from Tether's compliance team, the user sends USD to Tether's bank account. Tether then uses the USDT smart contract to mint an equivalent amount of USDT. Lastly, the newly created USDT are sent to the user's on-chain address, while the deposited USD are held in reserve. The process for redeeming USDT back into USD is the same process but reversed.
USDT is a centralized stablecoin that relies on a proof-of-reserve system to ensure its reserve assets match its circulating supply. However, the token has faced significant controversy since its inception due to its failure to provide audited reserve attestations by an independent auditor and its reserve reports does not specify the exact underlying assets. The reserve composition of USDT is considered riskier as it consists not only of cash and cash equivalents but also other assets and receivables from loans made by Tether to third parties. Further, USDT has the ability to "blacklist" any of its associated addresses at will. When a USDT address is blacklisted, it can no longer receive USDT and all of the USDT controlled by the address can no longer be trasnferred on-chain.