Tether’s Chief Technology Officer Provides Clarity: $1 Billion USDT Minting on Ethereum Intended for Chain Swaps

In a recent development, Tether, the stablecoin issuer, has generated another $1 billion worth of Tether USDT $1.00 stablecoin on the Ethereum blockchain. This action marks their second billion-dollar mint within a span of two months, adding to the total of over $16 billion minted by the company in 2023.

Tether’s Chief Technology Officer, Paolo Ardoino, took to Twitter to provide clarification regarding this latest mint. He stated that it is part of an “inventory replenish” process on the Ethereum network. Importantly, this issuance will not affect the overall market capitalization of USDT, as it is an “authorized but not issued transaction.” Ardoino explained that this freshly minted amount will be used as inventory for future issuance requests and chain swaps.

Chain swaps play a crucial role in enabling traders to transfer their digital assets from one blockchain to another. This process allows them to utilize their cryptocurrencies on various supporting blockchains. Ardoino further elaborated that Tether collaborates with different cryptocurrency platforms periodically to rebalance the liquidity of USDT across multiple blockchains. For instance, if a crypto exchange has an excess of USDT liquidity on the Ethereum blockchain but requires more on the Tron blockchain to process withdrawals, they can chain-swap their Ethereum-based USDT to the Tron blockchain.

Tether’s total minted amount in 2023 has now surpassed $16 billion, resulting in a current market capitalization of over $83 billion. USDT has experienced increased market dominance this year, with other stablecoin issuers facing challenges due to regulatory and banking issues in the United States.

The USD Coin USDC $1.00, issued by Circle and the second-largest stablecoin by market cap, was poised to overtake USDT as the largest stablecoin in 2022. However, factors such as the extended crypto market downturn and banking concerns in the U.S. have significantly affected USDC’s market confidence in 2023. Circle CEO Jeremy Allaire attributed the declining market capitalization of USDC to the crypto crackdown by U.S. regulators.