Tether CTO Clarifies $1B USDT Mint on Ethereum: Chain Swaps Explained
13. Juni 2023
• Tether minted $1 billion of its Tether (USDT) stablecoin on the Ethereum blockchain on June 12.
• The latest issuance is part of what the firm calls an “inventory replenish” on the Ethereum network and won’t impact the overall market cap of USDT.
• This amount will be used as inventory for next period issuance requests and chain swaps.
Tether Mints $1 Billion
Tether recently minted a fresh batch of $1 billion worth of its Tether (USDT) stablecoin on the Ethereum blockchain on June 12. This move is Tether’s second $1 billion mint in two months, bringing the total USDT minted by the stablecoin issuer in 2023 to over $16 billion.
Reason Behind Minting
The latest issuance, however, won’t impact the overall market cap of USDT since it was an “authorized but not issued transaction” according to Paolo Ardoino, Chief Technology Officer at Tether. This amount will be used as inventory for next period issuance requests and chain swaps.
Chain Swaps Explained
A chain swap is a process traders use to transfer digital assets from one blockchain to another in order to access other supporting blockchains for their cryptocurrency holdings. For example, if a crypto exchange has a surplus of USDT liquidity on the Ethereum blockchain and a deficit on the Tron blockchain they can perform a chain-swap to balance out their usage across both blockchains.
Tether has currently achieved a market capitalization of over $83 billion with its current market dominance hitting new highs due to regulatory and banking crises in the United States impacting other stablecoin issuers such as Circle’s USD Coin (USDC).
Despite being subject to scrutiny regarding transparency issues this year, Tether has managed to become one of top contenders in terms of cryptocurrency usage with its recent success in terms of value and market capitalization.