Most stablecoins continued to suffer from the difficult conditions in the crypto industry in 2023. However, this was not the case with USDT; The coin even reached a new market capitalization record. Now USDT issuer Tether gives the impression that another billion US dollars in USDT will be added, but that is not the case.
USDT market cap does not increase due to large transactions
On the social media platform X (formerly Twitter), Whale Alert writes that Tether has mined 1 billion USDT. Tether CTO Paolo Ardoino was quick to note that the tokens were intended to “refill” the balance of the Tron (TRX) network and that they were in fact not a new release.
The coins are not yet completely on the blockchain. This is an authorized but not issued transaction. This means that the amount is practically available on another blockchain, but still needs to be moved. It affects you Chain exchange, with Tron being the receiving end. The same amount will therefore be destroyed on another blockchain, probably Ethereum (ETH).
With this “half transaction,” Tether reduces the number of transaction confirmations by Tether employees. This makes sending the coins easier. According to CoinGecko, there is currently more than $83 billion worth of USDT in circulation, but this transaction does not change that.
PSA: Replenishment of $1B worth of inventory on Tron network. Note that this is an authorized but unspent transaction. This means that this amount will be used as inventory for issue requests and chain swaps in the next period.
— Paolo Ardoino 🍐 (@paoloardoino) September 19, 2023
Tether source of crypto controversy
However, this does not exclude a further increase in market value. Tether has quite a bit of cash. Last August there was almost $3.3 billion that could be used to mine more USDT. (Large) investors can also turn to Tether for large amounts of USDT. This will likely be done by transferring regular dollars into the crypto company’s bank accounts.
The publisher of the world’s largest stablecoin regularly causes controversy. For example, at the end of last year the judge had to publish its reserves, even though it is not a stock corporation. Tether’s influence on the crypto industry would be too great. Last May, it emerged that, in addition to cash, it also held Bitcoin and gold as collateral and had a large cash buffer. Still, one former SEC director remained deeply skeptical. The information about reserves does not have to correspond to the facts.