Breaking: Tether CTO Unveils $1B USDT Mint for Chain Swaps

Breaking: Tether CTO Unveils $1B USDT Mint for Chain Swaps
On June 12, Tether created a new supply of its stablecoin, Tether (USDT), valued at $1 billion on the Ethereum blockchain. This recent billion-dollar minting event occurred merely two months after Tether's previous minting on April 21.

Paolo Ardoino, the Chief Technology Officer of Tether, provided clarification on Twitter regarding the recent minting of USDT. Ardoino explained that this issuance is categorized as an "inventory replenish" on the Ethereum network. 

It's important to note that this minting does not affect the overall market capitalization of USDT, as it is classified as an "authorized but not issued transaction." According to Ardoino, the newly minted funds will serve as inventory for future issuance requests and chain swaps.

In the realm of cryptocurrency trading, a chain swap emerges as a valuable technique employed by traders to seamlessly shift their digital assets from one blockchain to another. This dynamic process grants traders the ability to explore and harness the potential of various supporting blockchains, enabling them to leverage their digital holdings across multiple blockchain networks. According to Ardoino, Tether engages in regular collaborations with diverse cryptocurrency platforms to facilitate the rebalancing of USDT liquidity across multiple blockchains. To illustrate, suppose a crypto exchange finds itself with an excess of USDT liquidity on the Ethereum blockchain but faces a shortage on the Tron blockchain, where it must process withdrawal requests.

In such a scenario, the exchange would initiate a chain swap, effectively transferring the Ethereum-based USDT to the Tron blockchain to address the deficit and meet withdrawal demands. Throughout 2023, Tether has successfully minted an impressive sum exceeding $16 billion in new USDT, contributing to its current market capitalization, which surpasses a noteworthy $83 billion. Notably, USDT has experienced a surge in market dominance during this year, particularly as other stablecoin issuers have encountered challenges stemming from regulatory uncertainties and banking crises within the United States.

Source: CoinGecko 

In 2022, the USD Coin (USDC), issued by Circle, made substantial progress in its quest to become the leading stablecoin by market capitalization, trailing closely behind USDT. However, the extended downturn in the cryptocurrency market, coupled with banking challenges in the United States, had a profound impact on USDC's market sentiment throughout 2023. Jeremy Allaire, the CEO of Circle, attributed the declining market capitalization of USDC to the intensified regulatory scrutiny of the cryptocurrency industry by U.S. authorities.

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