• Tether (USDT) has minted 1 billion USDT tokens on the Ethereum network.
• According to CTO Paolo Ardoino, this is an authorized but not issued transaction and the USDT will be used as inventory for the next period of issuance requests and chain swaps.
• Critics have raised concerns about the transparency and solvency of Tether, especially after a legal settlement with the New York Attorney General (NYAG).
Tether Treasury Mints One Billion USDT
A massive amount of Tether (USDT), the most popular stablecoin in the crypto market, has been minted at Tether treasury. According to a tweet by @whale_alert, one billion USDT were minted on the Ethereum network, which could indicate a surge in demand for the token.
CTO Explains That Minting Is Not an Issuance
Paolo Ardoino, the CTO of Bitfinex and Tether, quickly clarified that the minting was not an issuance but an inventory replenishment. Ardoino explained that this amount would be used as inventory for the next period of issuance requests and chain swaps, meaning that it would be transferred to other blockchains or exchanges as needed. He also said this was an authorized but not issued transaction, implying that reserves backed it.
Questions Around Transparency And Solvency
Tether claims to maintain a 1:1 peg with the U.S. dollar by holding equivalent reserves in bank accounts. However, there have been several controversies recently with critics questioning its transparency and solvency after a legal settlement with NYAG revealed that Tether was not fully backed at some point. Additionally, Tether has come under fire after a Wall Street Journal investigation stated that its partners used fake paperwork to gain access to bank accounts. According to the investigation, Tether used shell firms to get access to banking system back in 2018.
Competition In The Crypto Sector
This latest USDT minting coincides with rising competition in the crypto sector where Tether aims to woo investors away from other stablecoins such as USDC or DAI . Some remain concerned though that this large amount of minting could impact crypto markets as traders widely use it as medium of exchange and store of value.
Despite recent controversies surrounding its solvency and transparency issues , Tether remains one of largest stablecoin issuer with over 70% market share according global stablecoin index . This latest move indicates strong demand for its token despite criticism from some quarters .