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

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

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Tether minted a new $1 billion batch of its Tether (USDT) stablecoin on the Ethereum blockchain on June 12. The latest multi-billion dollar minting for the stablecoin issuer comes two months after its last minting on April 21.

Tether CTO Paolo Ardoino took to Twitter to clarify that the latest minting of USDT is part of what the company calls an “inventory replenishment” on the Ethereum network. However, the latest issuance will not affect the overall USDT market capitalization, as the latest minting is an “authorized but unissued transaction.” According to Ardoino, the last minted amount will be used as inventory for the next period of issuance requests and on-chain redemptions.

A chain exchange is a process that merchants use to transfer digital assets from one blockchain to another. This procedure allows merchants to access other supporting blockchains for the cryptocurrency they hold, allowing them to use their digital assets on various blockchains.

Ardoino explained that Tether regularly works with different crypto platforms to help them rebalance USDT liquidity across various blockchains. For example, if a cryptocurrency exchange has a liquidity surplus of USDT on the Ethereum blockchain and a deficit on the Tron blockchain, where it needs to process withdrawals, the exchange will on-chain exchange its Ethereum-based USDT to the Tron blockchain.

Related: Tether CTO at USDC depeg: ‘Bitcoin maxis was right all along’ | PBW 2023

Tether has minted over $16 billion of new USDT in 2023, with a current market capitalization of over $83 billion. USDT’s market dominance reached new highs in 2023 as other stablecoin issuers struggled due to the regulatory and banking crises in the United States.

Stablecoins pegged to the US dollar by market dominance. Source: CoinGecko.

The USD coin issued by Circle (USDC), the second largest stablecoin by market capitalization, was in the about to seize USDT as the largest stablecoin in 2022. However, the prolonged crypto winter and bank contagion in the US significantly affected USDC market sentiment in 2023. Circle CEO Jeremy Allaire blamed the crackdown on cryptocurrencies by US regulators. by the declining market capitalization of the stablecoin.

Tether did not respond to Cointelegraph’s requests for comment by post.

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