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Tether mined a new batch of $1 billion of its Tether (USDT) stablecoin on the Ethereum blockchain on June 12. The latest billion-dollar mint for the stablecoin issuer comes within two months of its last mint on April 21.
Tether CTO Paolo Ardoino clarified on Twitter that the latest USDT mint is part of an “inventory replenishment” on the Ethereum network. However, the latest issuance will have no impact on the overall market capitalization of USDT as the latest minting is an “authorized but not issued transaction”. According to Ardoino, the latest mined amount will be used as inventory for the next period of issuance requests and chain swaps.
PSA: 1B USDt inventory refills on Ethereum network. Note that this is an authorized but not issued transaction, meaning that this amount will be used as inventory for the next period’s issuance requests and on-chain swaps.https://t.co/Y1bqxZglgR
— Paolo Ardoino (@paoloardoino) June 12, 2023
A chain swap is a process that merchants use to transfer digital assets from one blockchain to another. This process allows merchants to access other subsidiary blockchains for the cryptocurrencies they hold, allowing them to access their digital assets on multiple blockchains.
Ardoino explained that Tether works with different crypto platforms from time to time to help them rebalance USDT liquidity across different blockchains. For example, if a crypto exchange has a surplus of USDT liquidity on the Ethereum blockchain and a deficit on the Tron blockchain where it needs to process withdrawals, the exchange will chain-swap its Ethereum-based USDT to the Tron blockchain.
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Tether expects to mine 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 struggle due to the regulatory and banking crisis in the United States.
The USD Coin (USDC) issued by Circle – the second largest stablecoin by market cap – was on the verge of taking over USDT as the largest stablecoin in 2022. However, the prolonged crypto winter and banking contagion in the US significantly affected the USDC market. Believe in 2023. Circle CEO Jeremy Allaire attributed the decline in stablecoin market capitalization to the crypto crackdown by US regulators.
Tether did not respond to Cointelegraph’s requests for comments by the publication.
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