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Tether announced it will coordinate with a third-party exchange to conduct a chain swap as it wants to convert 750 million USDT from Tron to Ethereum ERC20. The total supply of USDT will not change during this process, as per the firm.
A chain swap process entails moving cryptocurrencies from one blockchain to another, which enables traders to obtain access to the various blockchains that support the cryptocurrency they are holding. In general, it allows the use of their digital assets on these other supporting blockchains.
1B USDT Mint on Ethereum
The development follows Tether minting a fresh batch of $1 billion worth of its USDT on the Ethereum blockchain on Monday. Tether’s chief technology officer Paolo Ardoino explained on Twitter that the latest billion-dollar mint is part of the company’s inventory replenishment on the Ethereum Network. The transaction is authorized but “not issued,” meaning that this amount will be used as inventory for the next period of issuance requests and chain swaps.
Tether previously explained,
“Inventory replenishment is the process of creating new USD₮ that are stored in Tether’s treasury inventory as “authorized but not issued” USD₮. These tokens are not part of the total market capitalization of USD₮, as they have not been issued or released into circulation yet.”
USDT has positioned itself as a crucial piece of infrastructure of the crypto ecosystem and is widely used for conducting trading on cryptocurrency exchanges. Its issuer, on the other hand, has been at the receiving end of endless scrutiny over its reserve assets and lack of transparency for years.
But this year’s banking sector debacle, as well as the increasing crackdown on the asset class, has resulted in investors fleeing to USDT, thereby significantly boosting its dominance.
Tether’s Growing Dominance
USDT’s circulation hit a peak above $83 billion this week. One of the major factors that have catalyzed the surge is the latest price deviation of rival dollar-denominated stablecoin TrueUSD (TUSD).
The shrinking investor confidence in fellow Circle-issued USDC stablecoin is yet another reason that has led to market participants fleeing to the world’s largest stablecoin, USDT.
Last month, Tether announced expanding its footprint in Georgia with an investment in a payment processing company called, CityPay.io. The company also revealed plans to launch sustainable Bitcoin mining operations in Uruguay.