Tether has announced its plan to coordinate with a third-party exchange to conduct a chain swap to convert 750 million USDT from Tron to Ethereum ERC20. The company has stated that the total supply of USDT will remain unchanged during this process. A chain swap process allows traders to move their cryptocurrencies from one blockchain to another, enabling access to various blockchains that support the cryptocurrency they are holding. This move will allow traders to use their digital assets on these other supporting blockchains.
This announcement comes after Tether had minted $1 billion worth of USDT on the Ethereum blockchain on Monday. Paolo Ardoino, Tether’s chief technology officer, confirmed on Twitter that this new minting is part of the company’s inventory replenishment on the Ethereum Network. The transaction is authorized but “not issued,” meaning that the amount will be used as inventory for the next period of issuance requests and chain swaps.
Tether previously explained that inventory replenishment is the process of creating new USD₮ that are stored in Tether’s treasury inventory as “authorized but not issued” USD₮. These tokens are not part of the total market capitalization of USD₮, as they have not been issued or released into circulation yet.
USDT has become an essential infrastructure in the crypto ecosystem and is widely used for trading on cryptocurrency exchanges. However, its issuer has been under constant scrutiny over its reserve assets and lack of transparency for years. This year’s banking sector debacle and the increasing crackdown on the asset class have resulted in investors fleeing to USDT, significantly boosting its dominance.
USDT’s circulation has reached a peak of over $83 billion this week. One of the significant factors that have catalyzed this surge is the latest price deviation of rival dollar-denominated stablecoin TrueUSD (TUSD). The shrinking investor confidence in fellow Circle-issued USDC stablecoin is yet another reason that has led to market participants fleeing to the world’s largest stablecoin, USDT.
Last month, Tether announced its expansion in Georgia with an investment in a payment processing company called CityPay.io. The company also revealed its plans to launch sustainable Bitcoin mining operations in Uruguay.