Stablecoin issuer Tether has minted another batch of $1 billion worth of USDT on the Ethereum blockchain, making it the second $1 billion mint in just two months. The total USDT minted by the stablecoin issuer in 2023 has now gone over $16 billion. However, Tether’s CTO, Paolo Ardoino, took to Twitter to clarify that the latest USDT mint is part of the firm’s practice to “replenish inventory” on the Ethereum network and will not impact the overall market cap of USDT.
According to Ardoino, the latest minted amount will be used as inventory for the next period of issuance requests and chain swaps. Chain swaps are processes through which traders can transfer digital assets from one blockchain to another, giving them access to multiple supporting blockchains for the cryptocurrency they hold.
Tether works periodically with different crypto platforms to rebalance USDT liquidity across various blockchains. For instance, if a crypto exchange has a surplus of USDT liquidity on the Ethereum blockchain but has a deficit on the Tron blockchain, it may need to process withdrawals. In that case, the exchange will chain-swap its Ethereum-based USDT to the Tron blockchain.
While Tether maintains its stablecoin market dominance, USD stablecoins issued by Circle, such as USDC, have faced challenges. Circle-issued USD Coin (USDC) was on the verge of overtaking USDT as the largest stablecoin in 2022, but the prolonged crypto winter and growing bank runs in the U.S. significantly reduced USDC’s supply in 2023. Circle CEO Jeremy Allaire blamed the crypto crackdown by the U.S. regulators for the stablecoin’s declining market capitalization.
In comparison, Tether has managed to maintain its market dominance amidst the regulatory and banking crises in the United States. Its current market capitalization stands at over $83 billion, with more than $16 billion issued in new USDT in 2023 alone.
In conclusion, Tether’s latest minting of $1 billion in USDT on the Ethereum blockchain highlights the ongoing growth and dominance of the stablecoin issuer. While the minted amount will not impact the overall market cap of USDT, it serves as a testament to Tether’s influence in the stablecoin market, despite challenges faced by other issuers such as Circle.
Source: Cointelegraph
