According to Whale Alert, Tether released a fresh batch of USDT tokens worth $1 billion on the Ethereum blockchain on June 12, 2023. This issuance comes just two months after their previous release on April 21, 2023.
Paolo Ardoino, Tether’s chief technology officer, took to Twitter to clarify that this latest minting of USDT tokens is part of the company’s strategy to replenish its inventory on the Ethereum network.
PSA: 1B USDt inventory replenish on Ethereum Network. Note this is a authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps.https://t.co/Y1bqxZglgR
— Paolo Ardoino 🍐 (@paoloardoino) June 12, 2023
However, it’s important to note that these tokens are classified as “authorized but not issued,” meaning they will not impact the overall USDT market cap. Ardoino explained that these newly minted tokens will serve as inventory for future issue requests and chain swaps.
Chain swaps are essential for transferring digital assets between different blockchains. This functionality allows traders to utilize their digital assets across multiple blockchains by accessing additional platforms that support the specific cryptocurrency they hold.
Ardoino further elaborated that Tether occasionally assists various cryptocurrency platforms in rebalancing USDT liquidity across different blockchains. For instance, if a cryptocurrency exchange finds itself with an excess of USDT on the Ethereum blockchain but faces a shortage on the Tron blockchain for processing withdrawals, it can easily chain-swap its Ethereum-based USDT to the Tron blockchain.
Tether currently boasts a market capitalization exceeding $83 billion and has generated over $16 billion worth of new USDT tokens in 2023 alone. In contrast to other stablecoin issuers who have faced regulatory and banking challenges in the United States this year, Tether’s market dominance has reached unprecedented levels.
Previously, the USD Coin (USDC), issued by Circle, appeared poised to surpass Tether as the leading stablecoin in terms of market capitalization. However, in 2023, USDC experienced a significant decline in market confidence due to the prolonged crypto winter and banking issues in the United States. Circle CEO Jeremy Allaire in an interview with Bloomberg, attributed this decreasing value of USDC to the crypto crackdown initiated by U.S. regulators.
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