Tether Flags $1B USDT Allocation in Treasury for Tron Network Liquidity Boost
Summary:
A $1 billion authorization of USDT has been earmarked in Tether's Treasury to increase liquidity on the Tron network. The amount has been authorized but not yet issued, and will be used for future issuance needs and chain swaps within the Tron network. This follows a trend of significant USDT allocations in 2023, contributing to Tether's market cap exceeding $83 billion. In contrast, Circle’s USDC stablecoin saw its market cap decline, likely influenced by the fallout of Silicon Valley Bank.
Major blockchain monitoring accounts have spotted a $1 billion USDT allocation in Tether's Treasury, intended to boost short-term USDT liquidity on the Tron network. The large authorization was flagged by WhaleAlert, a prominent blockchain monitor, on X (previously known as Twitter), prompting an immediate reaction from Tether's CTO, Paolo Ardoino. He explained that the authorized USDT tokens would serve as a "refill" supply for the Tron network.
Ardoino clarified that while the billion-dollar allocation has been approved, it's not yet issued. Instead, it's earmarked to cover impending issuance requirements and chain exchanges within the Tron network. According to Tether's official FAQ page, creating such "authorized but not issued" USDTs simplifies the token creation and issuance process, ensuring better security due to less frequent need to use authorization private keys.
By having USDT ready in the treasury, Tether is able to issue USDT tokens instantly after receiving customer funds. This practice aids in maintaining the reserves at a full 100%. As Cointelegraph has reported, Tron-based USDTs hit record levels in 2023, accounting for $42.8 billion of circulating tokens. In contrast, the Ethereum blockchain has roughly $39 billion USDT in circulation.
Ardoino has previously addressed other large-scale USDT authorizations that raised attention in blockchain circles. For instance, a $1 billion authorization occurred in June 2023 to facilitate Ethereum chain exchanges.
In 2023, Tether's market cap breached the $83 billion mark, with over $16 billion in USDT minted since the start of the year. USDT continues to be the market leader among USD-pegged stablecoins in terms of market capitalization.
Meanwhile, Circle’s USDC stablecoin has seen its market cap fall from an initial $50 billion to $26 billion. The fallout of the Silicon Valley Bank (SVB) is believed to have contributed to USDC's shrinking market cap, as Circle had $3.3 billion invested in SVB when it collapsed in March 2023.
Published At
9/19/2023 11:27:44 AM
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