The most recognized digital currency is Bitcoin, but according to data from CoinMarketCap.com Tether is the digital token having the highest daily and monthly trading volume. The trading volume of Tether exceeded that of Bitcoin for the first time in April. Since then, it is consistently rising at about $21 billion per day, as per reports.
The monthly trading volume of Tether is around 18% higher than that of Bitcoin; therefore, making it the most important currency in the digital currency ecosystem. Regulators are on the guard due to such a massive chunk of the market being held by a single token in this unregulated market; as a result, they have put mechanisms to slow down the trading of crypto exchange-traded funds amidst growing concern of manipulation in the market.
According to global financial technology co-head of ConsenSys, Lex Sokolin,
Tether is a digital token that avoids fluctuation in price by putting in place several regulations such as pegs or reserve; hence, making it the most stable coin to be traded in the world. As per Sokolin, it is one of the pathways for safe players who want to trade in the crypto market without taking much risk. In countries where digital currencies are banned like China, people can buy Tether by paying cash over the counter.
As per a Coin Metrics report, Tether was used in 40% and 80% of transactions on Binance and Huobi, respectively.
Bitcoin is owned by no one, but Tether is issued by a private company based in Hong Kong, the same company that owns the Bitfinex crypto exchange. There is no knowledge as to how the supply of Tether is increased and decreased. Also, the exact amount of fiat currency in reserve for the Tether is unclear, as Tether is not audited independently. In April, Tether divulged that 74% of the Tethers are backed by cash and short-term securities.