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Tether Money Printer Doesn’t Skip a Beat – 1 Billion USDT Minted

2 mins
Updated by Geraint Price
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In Brief

  • Tether authorizes the minting, but not the issuance, of $1 billion USDT on Ethereum.
  • Some of the printed stablecoins will be used for on-chain swaps and will not be added to the coin's circulation.
  • The issuer refused to comment on its banking partners after Circle was revealed to hold $3.3 billion at Silicon Valley Bank.
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Tether has authorized the minting of 1 billion USDT on Ethereum for future issuance and chain swaps.

After the announcement, the total USDT authorized on Ethereum rose to over $36 billion. Tether issues the USDT stablecoin, which is pegged to the value of $1 through off-chain assets. 

New Minting Takes Stablecoin Volume on Ethereum to $36 Billion

Chief Technology Officer Paolo Ardoino reassured users the latest mint did not release new coins into circulation

Tether minted $1 billion in USDT on the TRON network on March 21, taking the total minting for that week to 4 billion USDT. The TRON blockchain holds the most issued USDT at $44 billion. TRON offers lower transaction costs than the Ethereum blockchain.

A chain swap, converting USDT from a token standard on one blockchain to another, sometimes requires Tether to mint USDT. USDT minted for this purpose does not increase the stablecoin’s circulation since the process involves a commensurate burn.

An exchange with unequal USDT distributions on different blockchains can request a swap from Tether. The exchange will send USDT from the old blockchain to Tether. Tether will then move funds from the destination blockchain to the exchange. If it doesn’t have enough funds on the destination blockchain, Tether will mint new USDT. An equivalent amount of USDT on the old blockchain will be burned.

Blockchain Research Labs found last year that Bitcoin (BTC) prices tend to increase after USDT mints. 

Surveying Bitcoin’s price around mints between 2014 and 2021 reveals an increase of 0.8% 30 minutes after a new mint. This stat shows investors feel good about Bitcoin when Tether creates new coins. On the other hand, burns do not create positive sentiment, their research found.

According to Kaiko’s research, the BTC/USDT trading pair dominates BTC volumes on centralized exchanges.

Tether Remains Cagey on Reserve Location

The issuers’ mints have previously raised concerns surrounding the reserves it backs USDT with. Tether claims its reserves include U.S.treasuries and cash deposits. According to its transparency page, it currently has $82 billion in assets.

It denied exposure to Silicon Valley Banks after tweets revealed rival Circle held reserves for its USDC stablecoin at the failed bank.

However, a Wall Street Journal article recently alleged that Tether accessed bank accounts through shell companies since 2018 after being denied banking services by Wells Fargo. Tether called the report inaccurate.

For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here.

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David Thomas
David Thomas graduated from the University of Kwa-Zulu Natal in Durban, South Africa, with an Honors degree in electronic engineering. He worked as an engineer for eight years, developing software for industrial processes at South African automation specialist Autotronix (Pty) Ltd., mining control systems for AngloGold Ashanti, and consumer products at Inhep Digital Security, a domestic security company wholly owned by Swedish conglomerate Assa Abloy. He has experience writing software in C,...