- Tether has recently minted a new supply of 1 billion USDT on the Ethereum blockchain.
- Within a timeframe of less than two months, Tether has minted its second batch of USDT.
- Tether CTO stated that the 1 billion USDT will be used as inventory.
Tether, a prominent issuer of stablecoins, has recently minted 1 billion USDT tokens on the Ethereum blockchain as a means to replenish its inventory. While there are perceptions that the creation of new USDT could potentially stimulate greater demand for the crypto, Tether’s CTO, Paolo Ardoino, clarified that the minting of additional USDT tokens primarily serves the purpose of supporting chain swap functionalities.
Ardoino commented on Whale Alert’s tweet about the 1 billion USDT, making a public announcement.
Note this is a authorized [sic] but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps.
The move marks the second such second minting of USDT tokens worth one billion dollars in less than two months. In April, the stablecoin issuer minted 1 billion USDT on the Ethereum blockchain. It is important to note that the minted USDT tokens are currently held in Tether’s treasury and classified as “authorized but not issued.” As a result, they are not included in the calculation of Tether’s total market capitalization.
Occasionally, when conducting a chain swap to convert USDT from one blockchain’s token standard to another, Tether may need to mint additional USDT tokens. It is important to note that the minting of USDT for this purpose does not result in an expansion of the stablecoin’s overall circulation, as the process involves a corresponding burn.
In situations where an exchange possesses an imbalanced distribution of USDT across different blockchains, they have the option to request a swap from Tether. The exchange will transfer USDT from the blockchain in use to Tether, which will then facilitate the transfer of funds from the desired blockchain to the exchange.
If Tether lacks sufficient funds on the intended blockchain, they will mint new USDT tokens. To maintain balance, an equivalent amount of USDT on the original blockchain will be burned. Tether explained how it works in one of their previous blog posts.
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