Tether Launches Self-Custodial Wallet with Cloud Backup Option
Tether, the issuer of the world’s largest stablecoin USDT, has released a mobile wallet application called tether.wallet — the company’s most direct move into retail distribution to date.
Supported assets
The app works with four assets: the USDT stablecoin, the gold-backed token XAUT, the US-focused USAT stablecoin, and Bitcoin — both on-chain and via the Lightning Network. At launch, USDT and XAUT are available on Ethereum, Polygon, Plasma, and Arbitrum, while USAT is initially exclusive to Ethereum.
One of the standout features is the elimination of gas tokens: transaction fees are paid directly in the asset being transferred, significantly lowering the barrier for new users who previously had to separately acquire ETH or other network tokens.
Usernames instead of addresses
The wallet uses human-readable @tether.me identifiers instead of traditional long wallet addresses. While this simplifies the user experience, some in the crypto community have raised concerns about the potentially centralized nature of such identifiers and their implications for true self-custody.
Self-custody and local transaction signing
Tether describes the app as fully self-custodial: all transactions are signed locally on the user’s device before being broadcast to the network, and private keys and recovery phrases remain exclusively in the user’s control at all times. This aligns with the company’s stated principle of building financial infrastructure that is open, neutral, and user-controlled.
Tether CEO Paolo Ardoino noted that with over 570 million people already using Tether’s technology, the logical next step was building a genuinely accessible tool for end users: “Our goal is to remove the technical friction that has prevented broader adoption.”
The app is available for download on both iOS and Android.
Cloud backup: convenience or risk?
Alongside local key storage, the wallet offers an option to back up private keys to the cloud. This feature has already drawn scrutiny from the community. A similar approach sparked significant backlash in 2023 when hardware wallet maker Ledger announced its Ledger Recover service, which involved cloud storage of encrypted key shards — widely criticized as contradicting the core principles of self-custody.
Whether users can opt out of cloud backups in tether.wallet remains unclear.
Background
The new wallet is built on top of Tether’s Wallet Development Kit (WDK), an open-source toolkit released in late 2024 and designed to help developers integrate non-custodial USDT and BTC wallets into any app, website, or device. tether.wallet marks the first consumer-facing product built on this foundation.
