Tether CTO clarifies $1B USDT mint on Ethereum is for chain swaps

The 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.

Tether minted a fresh batch of $1 billion worth 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’s chief technology officer Paolo Ardoino took to Twitter to clarify that the latest USDT mint is part of what the firm calls an “inventory replenish” on the Ethereum network. The latest issuance, however, won’t impact the overall market cap of USDT since the latest minting is an “authorized but not issued transaction.” According to Ardoino, the latest minted amount will be used as inventory for the next period of issuance requests and chain swaps.

PSA: 1B USDt inventory replenish on Ethereum Network. Note this is a authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps.https://t.co/Y1bqxZglgR

— Paolo Ardoino (@paoloardoino) June 12, 2023

A chain swap is a process traders use to transfer digital assets from one blockchain to another. This procedure allows traders to access other supporting blockchains for the cryptocurrency they hold, letting them utilize their digital assets on multiple blockchains.

Ardoino explained that Tether periodically works with different crypto platforms to help them rebalance the USDT liquidity across various 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.

Related: Tether CTO on USDC depeg: ‘Bitcoin maxis were right all along’ | PBW 2023

Tether has minted over $16 billion of new USDT in 2023, with its current market capitalization at more than $83 billion. USDT’s market dominance touched new highs in 2023 as other stablecoin issuers struggled due to regulatory and banking crises in the United States.

The Circle-issued USD Coin (USDC) — 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 U.S. significantly affected USDC’s market confidence in 2023. Circle CEO Jeremy Allaire blamed the crypto crackdown by the U.S. regulators for the stablecoin’s declining market capitalization.

Tether didn’t respond to Cointelegraph’s requests for comments by publication.

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