2023-06-15 16:39:51
Paolo Ardoino, Tether’s chief technology officer, clarified the purpose of issuing the newly minted $1 billion worth of USDT on the Ethereum blockchain. This is the second billion dollar issuance in the past two months, bringing the total USDT stablecoins issued in 2023 to over $16 billion.
Tether minted another $1 billion worth of USDT on the Ethereum blockchain on June 12th. Before that, the last time a similar transaction took place was on April 21, and the crypto community has a habit of wildly speculating regarding the reason for the issue and the expected use of the newly created coins. Paolo Ardoino, Tether’s chief technology officer, clarified on Twitter, that the latest issuance is part of the company’s Ethereum “restocking.” However, this minting does not affect the total market capitalization of USDT, as the newly issued coins have only technically been put into circulation, in fact they will be used as stock during subsequent issuance requests and inter-blockchain USDT transactions.
Traders typically send USDT between blockchains, because USDT is one of the cryptocurrencies that is always available in most of the crypto world regardless of blockchains and can be used liquidly for trading and transactions. “Exchanges often find themselves in the position of concentrating the majority of their USDT coins on a particular blockchain. In such cases, they turn to us to help with the chain replacement process and ensure smooth and efficient operation” Ardoino told Cointelegraph.
Ardoino explained that Tether regularly works with different crypto platforms to help balance the liquidity of USDT across different blockchains. For example, if a crypto exchange has too much USDT on the Ethereum blockchain, but a shortage on the Tron blockchain, the exchange must switch between the blockchains. Tether helps the exchanges in this, and the newly issued coins are used in these exchanges for technical settlement.
Tether will mint more than $16 billion worth of new USDT in 2023 and has a current market cap of over $83 billion. USDT’s market dominance reached new highs in 2023 due to other coin issuers struggling due to the US banking crisis and regulatory tightening. A notable example of this is the case of USDC, which came close to dethroning USDT as the stablecoin in 2022, however the aforementioned negative circumstances significantly affected market confidence in USDC. This was also voiced by Jeremy Allaire, the CEO of Circle, who blamed the anti-cryptocurrency measures of the US regulatory authorities for the decline in USDC’s market capitalization.
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