Recent blockchain tracking revealed an authorization for $1 billion worth of Tether (USDT) held in Tether’s Treasury, with the intention of providing immediate USDT liquidity for the Tron network. The authorization caught the attention of blockchain tracker WhaleAlert, who shared the information on social media.
Tether’s Chief Technology Officer, Paolo Ardoino, swiftly responded, clarifying that these USDT tokens were earmarked to serve as inventory for the purpose of replenishing the Tron network. Ardoino emphasized that this event represented an authorization and not an actual issuance. The allocated USDT amount would be utilized to fulfill upcoming issuance requests and facilitate chain swaps within the Tron network.
Tether’s official documentation explains that “authorized but not issued” USDT plays a vital role in securing the token creation and issuance process. It limits the need for Tether’s signatories to access their authorization private keys frequently, reducing exposure to security risks.
By authorizing USDT within the Tether Treasury, the company can issue USDT promptly as customer funds are received, ensuring that the issuer maintains a 100% reserve.
Tron-based USDT tokens have experienced record-high levels of circulation in 2023, with a total of $42.8 billion USDT in circulation on the Tron blockchain. Ethereum, in contrast, has approximately $39 billion USDT circulating on its blockchain.
Tether’s market capitalization has surpassed $83 billion in 2023, with $16 billion in USDT minted since January. USDT remains the leading USD-pegged stablecoin in terms of market capitalization.
In contrast, Circle’s USD Coin (USDC) has seen a decrease in market capitalization from $50 billion at the start of 2023 to $26 billion at the time of this report. USDC’s market cap decline is attributed, in part, to the impact of Silicon Valley Bank’s collapse in March 2023, as Circle had $3.3 billion tied up in the institution at the time of its failure.