April 19, 2024
Latest Cryptocurrency News

Tether Mints $1 Billion USDT to Support Issuance Requests and Chain Swaps

Tether created a fresh batch of $1 billion worth of its stablecoin, Tether USDT, on the Ethereum blockchain on June 12. This new issuance comes just two months after their previous minting on April 21.

According to Paolo Ardoino, Tether’s chief technology officer, this latest minting is part of a process called “inventory replenish” on the Ethereum network. He clarified on Twitter that although this new issuance is authorized, it won’t affect the overall market cap of USDT because it’s considered an “authorized but not issued transaction.” The newly minted amount will be used as inventory for future issuance requests and chain swaps.

Chain swaps allow traders to transfer their digital assets from one blockchain to another, giving them access to different supporting blockchains. Ardoino explained that Tether periodically collaborates with various crypto platforms to balance the liquidity of USDT across different blockchains. For example, if a crypto exchange has an excess of USDT on Ethereum but needs to process withdrawals on the Tron blockchain, they will chain-swap their Ethereum-based USDT to Tron.

In 2023 alone, Tether has minted more than $16 billion of new USDT, and its current market capitalization exceeds $83 billion. USDT’s market dominance has reached new heights as other stablecoin issuers face challenges due to regulatory and banking crises in the United States.

USD Coin (USDC), the second-largest stablecoin by market cap issued by Circle, was poised to surpass USDT as the largest stablecoin in 2022. However, the prolonged decline in the crypto market and banking issues in the US have significantly impacted USDC’s market confidence in 2023. Circle CEO Jeremy Allaire attributed the decreasing market capitalization of USDC to the crypto crackdown by US regulators.

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