Tether CTO clarifies $1B USDT mint on Ethereum is for chain swaps

Tether recently released a new batch of its USDT stablecoin, valued at $1 billion, onto the Ethereum blockchain on June 12. This billion-dollar minting by the stablecoin issuer comes within two months of its previous minting on April 21.

Tether’s CTO Paolo Ardoino tweeted to explain that the most recent USDT mint is a part of what the company calls a “inventory replenish” on the Ethereum blockchain. Nevertheless, this minting will not change the overall market cap of USDT as it is an “authorized but not issued transaction”. Ardoino further stated that the newly minted amount will be kept as stock for the upcoming period of issuance requests and chain swaps.

A chain swap is a method employed by traders to transfer digital assets from one blockchain to another. This process grants traders the ability to access other blockchain networks that support the cryptocurrency they possess, thus allowing them to make use of their digital assets across multiple blockchains.

Ardoino stated that Tether collaborates with various crypto platforms from time to time to assist them in achieving an equilibrium of USDT liquidity on multiple blockchains. For instance, if an exchange has an abundance of USDT liquidity on the Ethereum blockchain but is short on the Tron blockchain, where it has to handle withdrawals, the exchange will switch its Ethereum-based USDT to the Tron blockchain.

Tether CTO states that “Bitcoin maxis were correct all along” regarding USDC depeg, according to PBW 2023.

Tether has issued more than $16 billion worth of USDT in 2023, with its market capitalization surpassing $83 billion. USDT’s influence in the market reached unprecedented levels in 2023 as other stablecoin issuers encountered issues caused by regulatory and banking difficulties in the United States.

The USD Coin (USDC) issued by Circle was the second-largest stablecoin by market cap and was on track to surpass USDT as the top stablecoin in 2022. Unfortunately, the extended crypto winter and U.S. banking contagion in 2023 caused a lack of market confidence in USDC. Circle CEO Jeremy Allaire attributed the decrease in market capitalization to the crypto crackdown by U.S. regulators.

Tether did not provide any comments to Cointelegraph prior to the release of this article.

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