Tether, the stablecoin issuer, has recently generated a fresh supply of $1 billion worth of its Tether USDT stablecoin on the Ethereum blockchain. This latest issuance follows a similar minting event just two months prior in April. Paolo Ardoino, the chief technology officer of Tether, clarified on Twitter that the new minted USDT is part of an “inventory replenish” process on the Ethereum network. It’s important to note that this minting will not impact the overall market capitalization of USDT as it represents an “authorized but not issued transaction.”
According to Ardoino, the newly minted USDT will serve as inventory for future issuance requests and chain swaps. Chain swaps allow traders to transfer digital assets from one blockchain to another, enabling them to leverage their assets across multiple blockchains. Tether collaborates with various crypto platforms periodically to rebalance USDT liquidity across different blockchains. For instance, if a crypto exchange has an excess of USDT on the Ethereum blockchain but requires more liquidity on the Tron blockchain for processing withdrawals, they can chain-swap their Ethereum-based USDT to Tron.
In 2023 alone, Tether has minted more than $16 billion of new USDT, bringing its current market capitalization to over $83 billion. USDT’s market dominance has soared during this time, as other stablecoin issuers faced challenges due to regulatory and banking issues in the United States. The Circle-issued USD Coin (USDC), the second-largest stablecoin by market cap, had been poised to surpass USDT in 2022. However, USDC’s market confidence was significantly affected by the prolonged crypto winter and the banking contagion in the U.S. In fact, Circle CEO Jeremy Allaire attributed USDC’s declining market capitalization to the crypto crackdown imposed by U.S. regulators.
At the time of publication, Tether had not responded to requests from Cointelegraph for comments.
Get $200 Free Bitcoins every hour! No Deposit No Credit Card required. Sign Up