Tether is a blockchain platform that converts traditional fiat currency, such as US dollars, into a digital currency stablecoin that is formatted to move and transact on blockchains.
Tether issues users USDT at a 1:1 ratio in exchange for fiat USD. Because USDT exists on blockchain technology, it can be moved quickly and securely across digital platforms, something that fiat currency is quite bad at.
Tether always holds reserves of US dollars greater than or equal to the amount of USDT that has been issued, and because USDT are always backed by, and redeemable for USD at a 1:1 ratio, the price of 1 USDT is always pegged to the price of 1 USD.
Despite past accusations that Tether is not actually holding enough USD funds in its reserve to cover the outstanding USDT balance, Tether has maintained its stability and peg to the US dollar.