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Tether Unleashes $1B on Ethereum for Chain Swaps – Will ETH Soar to Unprecedented Heights? Report

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  • Tether mints another $1 billion worth of its stablecoin, USDT, on the Ethereum blockchain on June 12, explained as an “inventory replenish” for chain swaps by the company’s CTO.
  • Despite multiple mints in 2023, these do not affect USDT’s market cap as they are “authorized but not issued” transactions.

On June 12, Tether issued an additional $1 billion worth of its stablecoin, Tether USDT, on the Ethereum blockchain, marking its second billion-dollar mint in less than two months. Tether’s Chief Technology Officer, Paolo Ardoino, clarified on Twitter that this recent minting is not random, but a strategic move – part of what the company refers to as an “inventory replenish.”

This term refers to a practice of minting new tokens not intended to inflate the market cap, but rather to prepare for an upcoming round of issuance requests and chain swaps. Ardoino elaborated that these transactions are “authorized but not issued,” ensuring they don’t affect the overall USDT market cap.

In the world of digital currencies, a chain swap is a mechanism allowing traders to move assets from one blockchain to another. By facilitating such swaps, traders can leverage their cryptocurrencies across various blockchains, providing flexibility in their operations.

Ardoino went on to explain that Tether regularly collaborates with different crypto platforms to help balance USDT liquidity across an array of blockchains. For instance, if a crypto exchange has an abundance of USDT liquidity on Ethereum, but falls short on the Tron blockchain needed for withdrawals, Tether aids the exchange in chain-swapping its Ethereum-based USDT to the Tron blockchain.

With the latest addition, Tether has minted over $16 billion of new USDT in 2023, taking its current market capitalization to more than $83 billion. USDT’s market dominance reached new peaks in 2023 as its competitors faced headwinds from regulatory and banking crises in the United States.

The second-largest stablecoin by market cap, USD Coin (USDC), almost superseded USDT as the leading stablecoin in 2022. However, 2023’s crypto winter and US banking crises dampened market confidence in USDC, contributing to its market capitalization’s decline. Circle CEO Jeremy Allaire attributed this decline to the U.S. regulators’ crackdown on crypto. Tether has not responded to requests for comments by the time of publication.

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Godfrey Benjamin
Godfrey Benjamin
Godfrey Benjamin is an experienced crypto journalist whose primary goal is to educate everyone about the prospects of Web 3.0. His love for crypto was sparked during his time as a former banker when he recognized the clear advantages of decentralized money over traditional payments. Business Email: info@ethnews.com Phone: +49 160 92211628