The post Tether CTO Approves $1B USDT Mint on Tron Network Is for Chain Swaps appeared first on Coinpedia Fintech News
Tether, the leading stablecoin, has allocated $1 billion USDT to bolster the Tron network. This authorization, while significant, is not an immediate issuance. Paolo Ardoino, Tether’s CTO, clarified that it is set aside for future issuance requests and chain swaps from Tron.
He explained on X post that the recent $1 billion USDT minting is to restock the network’s inventory. Importantly, this doesn’t affect USDT’s total market value as it’s an “authorized but not issued” transaction. The freshly minted tokens will be held in reserve till the next phase for future issuance requests and chain swaps.
This move comes as Tether’s market capitalization surged past $83 billion in 2023, with an issuance of around $16 billion in USDT since January. This firmly establishes USDT as the top stablecoin pegged to the US dollar. On the other side, Circle’s USD Coin (USDC) faced a decline, going from $50 billion at the start of 2023 to $26 billion presently. This drop is attributed to the collapse of Silicon Valley Bank (SVB), where Circle had significant holdings.
However, Tron has struggled to maintain its pricing in a bear market. TRON (TRX) will remain slow unless it breaks beyond $0.08000.
Pre-authorization is an Enhanced Security Feature
Despite this, The Tron blockchain has seen a record-breaking surge in USDT issuance this year, boasting $42.8 billion in circulation. This surpasses Ethereum’s $39 billion circulating supply of USDT. Tether’s strategic allocation of “authorized but not issued” USDT is a security measure. It reduces the frequency of accessing authorization private keys, safeguarding against security threats during the token issuance process.
By pre-authorizing USDT in their Treasury, Tether ensures swift issuance once customer funds are received, maintaining a 100% reserve. This move underscores Tether’s commitment to maintaining stability and security while supporting the growing demands of blockchain networks like Tron.
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