Tether Mints Additional Billion USDT Amidst Growth and Market Optimism
Summary:
Tether, the company behind the world's largest stablecoin, has created an additional billion USDT, as announced by CEO Paolo Ardoino on December 25. This move, termed as "inventory refill," has been flagged and openly discussed on public platforms, sparking skepticism among industry observers. The newly minted USDT are authorized but not yet in circulation, suggesting a future release into the market. This follows Tether's significant growth in 2023, with its market capitalization escalating nearly 38% throughout the year. The growth has been attributed to heightened market optimism surrounding the potential approval of a spot Bitcoin exchange-trade fund.
Tether, the managing company behind the world's biggest stablecoin - Tether (USDT), has printed an additional USDT worth one billion, stated CEO Paolo Ardoino, highlighting the move as "authorized but not yet released.” The information was first brought to light by blockchain monitoring service Whale Alert through a post on X (previously Twitter) on December 25, indicating that the Tether Treasury had created a fresh billion USDT (equivalent to $1 billion).
In response to the announcement, Tether CEO Ardoino explained via a public announcement on the Whale Alert's X thread that this was an "inventory refill" conducted on the Ethereum blockchain. He specified that these funds will serve as stocks for future issuance requirements and chain exchanges, adding that while the transaction has been authorized, it isn't yet issued.
To draw a parallel with conventional finance, stock refill involves securing supplies in adequate quantities to fulfil customer demand without excessively hoarding inventory. In context of Tether, this means generating new USDT that sit in the Tether Treasury pool as "authorized but not yet in circulation". This means that these freshly minted tokens do not contribute to the overall USDT market value considering they are yet to be released into circulation.
As shown in the statistics from the Tether Transparency page, as of December 26, 2023, around $925 million of Ethereum-based USDT are at the "authorized but not yet released" stage. The previous instance of a USDT mint of similar proportions occurred in September 2023, flagged again by Whale Alert, with Ardoino reiterating then that it was an authorized transaction and not yet completed, due to serve potential requests for issuance and chain swaps.
Ardoino's recent announcement has been met with suspicion from industry observers who question the lack of clarity surrounding transactions of this nature under the Tether umbrella. Queries were raised about the roles of individuals involved in such transactions and statements suggesting a potential link between this new USDT minting and Bitcoin (BTC) price bump have also emerged.
Over 2023, Tether has exhibited substantial growth, setting new records in market value. As CoinGecko data suggest, Tether's market worth has escalated about 38% since January, skyrocketing from $66 billion to $91 billion. As of now, Bitcoin is being traded at $42,760, showing a slight ~2% slump over the past day.
Tether credited the expansion of USDT to two major factors in November 2023, one being the rising market anticipation concerning the approval of a Bitcoin-based exchange-traded fund. Simultaneously, the company had been increasing its engagement with Bitcoin-related endeavors over the year, announcing plans to buy Bitcoin for managing its reserves and initiating several Bitcoin mining undertakings. As of now, Tether spokespersons have not commented on the matter.
On a related note, the SEC has postponed decisions related to Ether ETFs, a Binance agreement has received approval, and SBF has experienced an additional courtroom setback, as covered in a Hodler’s Digest from December 17-23.
Published At
12/26/2023 4:23:32 PM
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