What is Tether
Tether (USDT) is a stablecoin aiming to hold a value pegged to the US dollar, backed by reserves declared by Tether Limited. It's the most traded stablecoin in the world by volume.
Stablecoins like USDT are mainly used as a temporary parking spot for liquidity between trades on exchanges, and should be clearly distinguished from volatile cryptocurrencies like Bitcoin or Ethereum.
Frequently asked questions
Is Tether regulated in the UK?
The UK has its own evolving regime for cryptoasset regulation, separate from the EU's MiCA framework. Crypto exchanges and custodians must register with the FCA for anti-money laundering purposes, but this doesn't equate to the investor protections that regulated financial instruments like ETFs and shares carry.
What's the difference between buying Tether on an exchange versus via an ETP?
On an exchange you hold the keys directly (or the exchange custodies them for you); an ETP (Exchange Traded Product) is instead a listed financial instrument that tracks the price, purchasable through the same broker account you'd use for ETFs and shares.
How is Tether taxed in the UK?
Gains from cryptocurrencies in the UK are generally subject to Capital Gains Tax, with specific rules that differ from those for ETFs and shares held in an ISA — this is an evolving area, so check the latest HMRC guidance or speak to a tax adviser for your situation.
