Cryptocurrency version of the US dollar

If you ever used Binance, you may have encounted a cryptocurrency called USDT. It strangely resembles the price of a US dollar doesn't it? This is no mistake as USDT or better known as Tether is somewhat like the cryptocurrency version of the US dollar. Tether since its introduction in 2015 has seen a surge in popularity. Today, Tether has a 2.3 Billion dollar market cap which places it at the 15th rank.

Tether is directly backed by the Us dollar. That means that for each Tether there is then there is one US dollar in the company Tether Limited (founding company of this cryptocurrency) bank account and they are directly exchangeable.

So what the point? Why bother if it's just like the Us dollar? Wouldn't it be better if we just use USD instead of this since they are similiar?

Tether Limited argues that using this method to buy virtual currencies allows users to move fiat in and out of an exchange more quickly and cheaply. Also, exchanges typically have rocky relationships with banks, and using Tether is a way to circumvent that.

"Exchange users know how risky it can be to hold fiat currencies on an exchange. With the growing number of insolvency events it can be quite dangerous. As mentioned previously, we believe that using tethers exposes exchange users to less counter-party risk than continually holding fiat on exchanges," the company explains in a whitepaper on its website.