Does USDT Truly Mirror the USD? Evidence from the USDT/VND Exchange Rate

Abstract

Purpose: This study evaluates the stability of USDT and its potential to serve as a substitute for the US dollar (USD) in financial transactions in Vietnam. The core objective is to analyze the USDT/VND exchange rate to assess whether USDT can consistently maintain parity with USD under domestic financial conditions.
Design/methodology/approach: Daily data were collected from Investing.com and Yahoo Finance, covering the period from August 29, 2017, to June 30, 2025. The ARIMAX(2,1,2) model was employed, incorporating BTCUSD, ETHUSD, and the U.S. Dollar Index (DXY) as explanatory variables. This modeling framework allows for the examination of both macroeconomic influences and crypto market dynamics on the USDT/VND exchange rate.
Findings: The results reveal a strong correlation between USDT/VND and USD/VND. The model demonstrates high predictive accuracy, with R² = 0,9416; MAE = 918,18; RMSE = 1041,51; SMAE = 0,0365, and Theil’s U = 0,0211. While BTC and ETH do have an influence, their effects are confined to periods of high market volatility and do not undermine the core stability of USDT.
Originality/value: The study contributes to expanding the understanding of stablecoins' roles in developing economies. Although legal and regulatory aspects of USDT are not addressed, the empirical findings indicate that USDT holds potential as a viable alternative to USD in the Vietnamese context, laying the groundwork for future research on stablecoins and decentralized finance.