Disclaimer: Information found on CryptoreNews is those of writers quoted. It does not represent the opinions of CryptoreNews on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoreNews covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.
Accounts that track blockchains for significant mints, trades, and token transfers have identified a $1-billion authorization of Tether (USDT) within Tether’s Treasury, aimed at providing immediate USDT liquidity for the Tron network.
Blockchain monitoring service WhaleAlert brought attention to the $1-billion authorization on X (formerly Twitter), prompting a swift response from Tether’s chief technology officer, Paolo Ardoino, who indicated that the USDT tokens would serve as inventory to “replenish” the Tron network.
Ardoino clarified that this event represents an authorization rather than an actual issuance, with the designated amount intended to function as inventory for forthcoming issuance requests and chain swaps from the Tron network.
PSA: 1B USDt inventory replenish on Tron Network. Note this is an authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps.https://t.co/Y1bqxZglgR
— Paolo Ardoino (@paoloardoino) September 19, 2023
According to Tether’s official FAQ page, “authorized but not issued” USDT is necessary to facilitate the creation and issuance process of tokens:
“By creating ‘authorized but not issued’ USDT, Tether limits the number of times Tether’s signers need to access their authorization private keys, thereby reducing their exposure to security threats.”
By authorizing USDT in the Tether Treasury, the company can issue USDT immediately upon receiving customer funds, ensuring that the issuer retains 100% of its reserves.
Related Posts
As previously reported by Cointelegraph, USDT tokens issued on the Tron blockchain reached all-time highs in 2023. The network currently holds $42.8 billion USDT in circulation, while the Ethereum blockchain has approximately $39 billion USDT circulating on-chain.
Tether’s CTO recently elaborated on similarly substantial USDT authorizations that have been noted by blockchain trackers, including a $1-billion USDT mint to facilitate Ethereum chain swaps that occurred in June 2023.
Tether increases USDT supply in 2023. Source: CoinMarketCap
Tether’s market capitalization has surpassed $83 billion in 2023, having minted around $16 billion in USDT since January. USDT continues to be the leading United States dollar-pegged stablecoin by market capitalization.
In contrast, Circle’s USD Coin (USDC) stablecoin has experienced a decline in its market cap from $50 billion at the beginning of 2023 to $26 billion at the time of this report.
The downfall of Silicon Valley Bank (SVB) is noted as a factor contributing to USDC’s market cap reduction, with Circle having $3.3 billion invested in the institution at the time of its collapse in March 2023.
Magazine: Deposit risk: What do crypto exchanges really do with your money?
