A massive amount of Tether (USDT), the most popular stablecoin on the crypto market, has been minted in the Tether treasury.
According to a tweet from @whale_alert, a service that tracks large cryptocurrency transactions, 1 billion USDT has been minted on the Ethereum network, which could indicate an increase in demand for the token.
However, Paolo Ardoino, CTO of Bitfinex and Tether, was quick to clarify that the minting was not an issue but a replenishment of inventory.
Ardoino explained that this amount would be used as inventory for the next issuance request period and chain exchanges, meaning it would be transferred to other blockchains or exchanges as needed.
He also said that it was an authorized but not issued transaction, implying that reserves supported it.
Tether claims to maintain a 1:1 peg to the US dollar by holding matching reserves in bank accounts.
However, the project has been on the wrong end of several controversies recently, with critics questioning its transparency and solvency, especially after a legal settlement with the New York Attorney General (NYAG) revealed that Tether was not fully backed in sometime.
Additionally, Tether has come under fire after a Wall Street Journal investigation He claimed that his associates used false paperwork to gain access to bank accounts.
According to the investigation, Tether used shell companies to access the banking system in 2018.
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Tether moves to dominate the stablecoin market
This latest USDT minting coincides with increasing competition in the cryptocurrency sector, where Tether aims to steer investors away from other stablecoins.
However, some remain concerned that USDT minting could affect the crypto market as it is widely used by traders and investors as a means of exchange and store of value.
bondage is the larger stablecoin issuer, with a market capitalization of $81,418,055,596, according to data from CoinMarketCap.
Analysts believe that an increase in the supply of USDT could signal an uptrend for bitcoin (BTC) and other cryptocurrencies, as it indicates more liquidity and demand in the market.
Others, however, warn that USDT could pose a systemic risk to the crypto industry if it faces regulatory or legal challenges in the future.
The total USDT supply as of April 21 was 85,091,735,572, spread across various blockchains and platforms.
