Why USDT Tether a Stablecoin firm minted 4 Billion USDT in 4 weeks from Oct 19 to Nov 10 2023

By Raghav Sawhney

In the ever-evolving landscape of cryptocurrency, Tether, a leading stablecoin issuer, has recently made headlines with its significant issuance of USDT tokens, stirring the crypto market and drawing attention from investors and regulators alike. Over the past month, Tether has issued a staggering 4 billion USDT, contributing to a total of 22.75 billion USDT minted in 2023 alone. This move not only highlights the increasing demand for stablecoins amidst the volatile nature of digital currencies but also raises questions about the implications of such large-scale token issuance on the crypto market dynamics. As Tether continues to expand its footprint, balancing coin minting and burning, and hinting at groundbreaking projects for 2024, the cryptocurrency community watches closely, analyzing each step’s potential impact on the broader financial ecosystem.

Over the last month, Tether has minted 4 billion USDT, representing approximately 18% of the total USDT issued in the year 2023 so far.

Volume of Issuance

Tether has issued 4 billion USDT over the past month. This includes:

According to Whale Alert data.

Total Issuance in 2023

According to Whale Alert data, Tether has minted 22.75 billion USDT in 2023. Of this, 13 billion USDT (57%) was issued on the Tron blockchain, and the remaining 9.75 billion USDT on the Ethereum blockchain.

Issuance Pattern

Tether has been actively minting new USDT stablecoins throughout the past year. Notable issuances include:

  • 9 billion USDT in March 2023.
  • 3 billion USDT in the month prior to March.
  • 3.75 billion USDT between June 12 and July 12.

Tether’s Chief Technology Officer and newly appointed CEO, Paolo Ardoino, responded to the data from Whale Alert on X (previously known as Twitter), regarding the recent transaction of 1 billion USDT on the Tron network. He clarified that this transaction was meant for replenishing Tether’s USDT reserves. Ardoino explained that this was a pre-approved transaction, but the tokens were not yet issued. He indicated that these funds are set aside to fulfill future issuance demands and for facilitating swaps between different blockchain networks.

Coin Burning

Tether has also been involved in burning some of its coins. Significant burn events include:

  • 1.2 billion USDT on the Tron blockchain on August 22.
  • 3.1 billion Tron USDT in June.
  • 2 billion Ethereum USDT in February.

Market Reaction

The cryptocurrency community has shown a keen interest in these minting activities. Some have drawn correlations between aggressive USDT minting and significant market events, such as the collapse of certain banks in March 2023.

A user on X expressed on Twitter “Last time this much tether got printed in a week a whole bank blew up.”

Bank Implosions and Tether

The article mentions the shutdown of banks like Silicon Valley Bank, Silvergate, and Signature Bank in March 2023. There were allegations of exposure between Tether and these banks, which Tether denied, stating it had no exposure to them.

Future Projects

Tether’s CEO, Paolo Ardoino, hinted at upcoming projects for 2024. He suggested that these projects could significantly impact popular Web2 centralized services.

Context and Implications:

Stablecoin Dynamics: The issuance of such a large volume of USDT reflects the growing demand for stablecoins in the crypto market. Stablecoins like USDT are crucial for traders and investors as they provide a way to hedge against volatility in other cryptocurrencies.

Blockchain Preference: The preference for issuing more USDT on the Tron blockchain compared to Ethereum could be due to factors like transaction speed, cost, or network stability.

Market Impact: The issuance of USDT can have significant implications for the cryptocurrency market. It can affect liquidity, trading volumes, and potentially the price dynamics of other cryptocurrencies.

Regulatory Attention: Such large-scale issuance of stablecoins is likely to attract regulatory attention, especially considering the growing scrutiny of the cryptocurrency market by various governments and financial authorities.

Overall, Tether’s activities reflect both the growing role of stablecoins in the crypto ecosystem and the dynamic nature of the market. The implications of these activities are multifaceted, affecting market liquidity, regulatory focus, and the strategic direction of cryptocurrency platforms.

Raghav Sawhney

Raghav is a significant contributer who uses his knowledge, skills and experience towards development & growth of the organisation in an efficient and effective manner.

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