Tether issued 1 billion USDT as "reserves"
December 28th, 2023

On December 24, Tether, a major player in the stablecoin market, generated an additional 1 billion USDT stablecoins on the Ethereum network. Paolo Ardoino, the CEO of Tether, clarified the purpose behind this move in response to a post on X by WhaleAlerts. He explained that these newly minted tokens were part of an authorized transaction not yet released for circulation.

Ardoino highlighted that these freshly minted "stable coins" serve as reserves earmarked for future issuance requests and network swaps, effectively augmenting Tether's treasury reserves. It's important to note that in traditional finance, replenishment involves suppliers maintaining reserves to meet customer demand for a specific asset. In Tether's context, this entails the creation of new USDT, purportedly held in treasury reserves.

Tether has explicitly mentioned in its FAQ that these tokens are not immediately included in the total market capitalization of USDT as they have yet to be issued into circulation.

According to data from Tether Transparency as of December 26, approximately 925 million USDT were marked as "authorized but not issued" specifically on the Ethereum network. This recent move echoes a similar operation Whale Alert had previously detected on the Tron network in September. Ardoino attributed this operation on Tron to a comparable strategy of augmenting reserves.

The deliberate move by Tether to generate a substantial sum of USDT as reserves underscores the company's strategy to bolster its capacity for addressing future issuance demands and optimizing its operational capabilities within the stablecoin market.

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