In a recent development, Tether’s Chief Technology Officer (CTO) Paolo Ardoino has clarified the recent transaction that occurred in Tether’s treasury.
1 Billion USDT Authorized Not Issued
In a tweet shared on his X (formerly Twitter) platform, Ardoino explained that the 1 Billion USDT which Whale Alert had referenced in a tweet as “minted” was authorized but not issued (not in public hands yet).
— Whale Alert (@whale_alert) September 19, 2023
According to him, these tokens were used to restock the issuer’s treasury wallets on the Tron Network. Ardoino further explained that the 1 billion USDT will be used as “inventory for next period issuance requests and chain swaps.”
Tron continues to account for most of the USDT in circulation as there are currently more than $43 billion in USDT authorized on the blockchain (although $947 million of these tokens haven’t been issued yet).
Transactions like the one under consideration usually occur when a customer requests to perform a cross-chain swap for an amount that exceeds the one in Tether’s treasury wallets on the destination blockchain. For accountability purposes, the USDT issuer has to balance its reserves on that particular blockchain.
After the new tokens are minted on the destination blockchain, Tether either burns the same amount of tokens on the initial blockchain (in order to balance its circulating supply and its dollar reserves) or retains these tokens and uses them for future chain swaps.
Tether’s Dominance
The world’s largest stablecoin by market cap is currently available on Bitcoin, Ethereum, Algorand, Avalanche, EOS, Polkadot, Polygon, Solana, TRON, Tezoz, and Kava. Meanwhile, its closest rival, USDC, currently supports 14 blockchains, namely Algorand, Arbitrum, Avalanche, Base, Ethereum, Flow, Hedera, NEAR, Noble, OP Mainnet, Polkadot, Solana, Stellar, and TRON.
Despite this, Tether and its USDT stablecoin have dominated on all fronts and in all metrics that matter. The stablecoin currently boasts a circulating supply of over 83 billion USDT in comparison to USDC’s 26 billion. For one, the circulating supply is proof that many in the crypto community seem to have a preference for USDT over other stablecoins, including USDC.
As USDT and USDC continue to battle it out for most of the stablecoin market share, other stablecoin issuers and their stablecoin are experiencing difficulties in the market. For example, a recent report showed that PayPal’s PYUSD stablecoin has seen less than favorable adoption rates since it was launched on August 7.
Meanwhile, Paxos, the issuer of the PYUSD stablecoin, also took another hit as Binance recently began the process to axe the BUSD stablecoin (which Paxos also issues) from its exchange.
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