2023-12-28 06:34:33
Tether Hits Another 1 Billion at Christmas “authorized but not issued” mentioned USDT, which caused distrust from the community.
Tether, the operator of the world’s largest stablecoin, minted another billion USDT, which according to CEO Paolo Ardoino “authorized but not issued“, so these newly minted tokens do not contribute to the total market capitalization.
1 billion new USDT
On December 25, the Whale Alert platform drew the attention of users to the fact that Tether Treasury had minted 1 billion USDT. Tether CEO Ardoino subsequently responded with a public service announcement stating that the transaction was a “stock top-up” on the Ethereum blockchain.
PSA: 1B USDt inventory replenish on Ethereum Network. Note this is an authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps.
— Paolo Ardoino ???? (@paoloardoino) December 25, 2023
In traditional finance, inventory replenishment is the process of ordering inventory in time to fully meet customer demand and avoid inventory shortages without accumulating excess inventory. This stockpile, from Tether’s perspective, is the process of creating and storing authorized but unissued USDT.
Company website according to these tokens are not part of the total market capitalization of USDT as they have not yet been issued or circulated. As of December 26, 2023, there was $925 million USDT in authorized but unissued status on the Ethereum network, according to Tether Transparency.
Why is the community skeptical?
Some industry observers were skeptical of Arduino’s latest announcement. The uncertainty was mainly caused by a lack of transparency and multiple occurrences.
“It would be interesting to examine the document or agreement and learn more regarding the people responsible for this Christmas miracle of creating USDT 1 billion out of thin air”
Posted by a commenter
Skeptical voices are further strengthened by the fact that this is not the first time that Tether authorizes huge amounts. In September of this year, 1 billion USDT was also approved, which was similarly explained by authorized but unissued creation. According to Ardoino, this was necessary to fill the network and ensure liquidity on the Tron network.
Others have argued that the latest USDT will likely serve to boost the price of Bitcoin, as some industry observers have linked Tether’s USDT minting to pumping up the price of BTC.
Tether’s market capitalization reached a new all-time high in 2023. Since January, Tether’s total market capitalization has increased by nearly 38%, from $66 billion to $91 billion. Among other things, the performance was due to the USDC breakout and market excitement around the spot Bitcoin ETF.
1703748869
#billion #USDT #approved #Tether #community #skeptical