Blockchain in Payments
Working principles, network types, consensus mechanisms, DeFi protocols, stablecoins, and CBDCs — a technical guide to blockchain technology and its integration with modern payment infrastructure.
Tether (USDT) Overview
Tether (USDT) is the largest stablecoin by market capitalisation — well over $150 billion outstanding — issued by Tether Limited and designed to track the US dollar 1:1. Crucially, USDT is not its own blockchain: it is a token contract deployed across about ten host chains, so a "USDT payment" is a token transfer on whichever chain you choose, settled in that chain's blocks and paid for in that chain's native gas coin.
Where USDT lives
| Chain | Token standard | Share of supply | Typical use |
|---|---|---|---|
| Tron | TRC-20 | Large share (roughly 40–50%) | Cross-border transfers & remittances (low fees) |
| Ethereum | ERC-20 | Large share (roughly 40–50%) | DeFi collateral, institutional settlement, CEX float |
| Solana | SPL | Growing | Fast, low-cost retail & payments |
| Others | Avalanche, Polygon, TON, Liquid, Near… | Small | Ecosystem-specific liquidity |
| Legacy | Omni (on Bitcoin) | Discontinued | Original 2014 issuance; Tether stopped supporting it in 2023 |
Reserves & backing
Tether publishes quarterly attestations by BDO Italia (an attestation is a point-in-time review, not a full financial audit). Reported reserve composition:
| Asset | Approx. share |
|---|---|
| US Treasury bills (direct + indirect) | Roughly three-quarters or more |
| Overnight repo & cash equivalents | Single digits |
| Gold | Several $ billion |
| Bitcoin | Several $ billion |
| Secured loans & other investments | Remainder |
Shares change each quarter — check the latest BDO attestation. Tether's Treasury exposure (well over $100B) would rank it among the largest sovereign holders of US debt. Reserve transparency has historically been questioned, and Tether has not completed a full audit.
Integrating USDT payments
A USDT transfer is an ordinary token transfer on the host chain. You move USDT but pay the network fee in that chain's native coin — ETH on Ethereum, TRX on Tron, SOL on Solana. USDT uses 6 decimals on Ethereum and Tron (so 1 USDT = 1000000 base units), unlike most 18-decimal ERC-20s.
| Property | Ethereum | Tron | Solana |
|---|---|---|---|
| Standard | ERC-20 | TRC-20 | SPL |
| Decimals | 6 | 6 | 6 |
| Gas paid in | ETH | TRX (or energy) | SOL |
| Typical fee | Cents to dollars | A few TRX of energy, or free with staked energy | <$0.001 |
| Finality | ~12.8 min | ~1 min (19 blocks) | ~13 s finalized |
Canonical contract / mint addresses
0xdAC17F958D2ee523a2206206994597C13D831ec7TR7NHqjeKQxGTCi8q8ZY4pL8otSzgjLj6tEs9vMFrzaCERmJfrF4H2FYD4KCoNkY11McCe8BenwNYBMerchant settlement flow
transfer(to, amount) with the amount in 6-decimal base units, paying gas in the native coin.Transfer event for the expected amount & reference, then releases goods after the chain's finality window.Regulatory & compliance notes
EU / MiCA: Tether has not obtained MiCA e-money-token authorisation, and major EU exchanges have delisted USDT spot pairs for EEA users since 2025. US / GENIUS Act (signed July 2025): USDT itself is issued offshore; for the US market Tether launched a separate token, USAT, in January 2026, issued by the federally chartered Anchorage Digital Bank. USDT contracts include an issuer freeze/blacklist function used for law-enforcement requests. Always confirm USDT's legal availability in your users' jurisdictions before integrating.