A lot of traders admit that they sometimes misunderstand the technological framework behind stable smart-coins such as Tether or TrueUSD, even though those coins are used as the major shorting tools in large crypto exchanges. Tether is not traded on VHCEx, as it is unnecessary thanks to our exchange's full compliance with commercial laws and subsequent trading of fiat United States Dollars and Malaysian Ringgits - these currencies are also traded on the fee-free basis. However, it is enlightening for our traders to get to know more about this type of coins, especially amidst allegations of market manipulation executed by the issuing authority of Tether.
Tether is a cryptocurrency issued by Tether Limited company that uses Omni Layer protocol. Omni Layer protocol is an open-source software that interacts with blockchain by ensuring emission and burning of tokens built on Bitcoin blockchain. Tether currencies are 100% backed by real-life fiat currency deposits on Tether Limited's bank accounts. Financial backing of the cryptocurrency is provided by a bank trust in Taiwan. The ratio of emitted Tether tokens to actual financial deposit can be tracked on the platform's website.
Theoretically, USDT can be exchanged for USD at any time with the platform itself. However, the terms and conditions of the platform expressly state that Tether is neither money nor monetary instruments, and, most importantly, Tether Limited is not obliged to process the exchange of its tokens into fiat currencies that back the tokens.
