Tether Issues $1 Billion USDT to Support Binance’s Liquidity Transition from TRON to Ethereum
Tether has issued $1 billion in USDT on the Ethereum network to assist Binance with liquidity conversion. This marks the second $1 billion issuance by Tether in less than two months.
Tether Issues Another $1 Billion USDT to Support Binance’s Liquidity Transition from TRON to Ethereum
Binance Transfers $750 Million USDT from TRON to Ethereum
On June 12, Whale Alert reported that Tether had issued $1 billion worth of USDT tokens on the Ethereum blockchain.
While some view the issuance of new USDT as a factor boosting the recovery of cryptocurrencies, Paolo Ardoino, CTO of Tether, explained that the new issuance is intended to support cross-chain swaps.
PSA: 1B USDt inventory replenish on Ethereum Network. Note this is a authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps.https://t.co/Y1bqxZglgR
— Paolo Ardoino 🤖🍐 (@paoloardoino) June 12, 2023
"Tether regularly works with various third parties (exchanges, hedge funds, etc.) to help them balance USDT liquidity across different chains," Ardoino stated. "For example, exchanges supporting Tether USDT across multiple chains may hold most of their USDT on one chain (like TRON) but need to process withdrawals on another chain (like Ethereum). Therefore, these third parties require cross-chain swaps."
After 12pm UTC today, #Binance will be swapping 750M USDT-TRX for USDT-ETH directly with the Tether team to ensure stablecoin liquidity across all chains for our users.
— Binance (@binance) June 12, 2023
If you see any significant movements of USDT from our wallets today, that's why.
Funds are SAFU.
Cross-chain swaps refer to the process of transferring tokens from one blockchain to another, allowing users to connect assets across different chains.
Binance to Convert $750 Million USDT from TRON to Ethereum
By the evening of June 12, Binance announced it would convert $750 million USDT from TRON to Ethereum to meet user liquidity demands.
💵 💵 💵 💵 💵 💵 💵 💵 💵 💵 1,000,000,000 #USDT (1,000,400,000 USD) minted at Tether Treasuryhttps://t.co/Tpsakud9df
— Whale Alert (@whale_alert) April 20, 2023
Binance has recently faced a wave of user withdrawals following the SEC’s lawsuit against the exchange last week. According to Nansen data, the exchange experienced net withdrawals of up to $2.5 billion over the past week.
$1 Billion USDT Issuance Marks Second Such Event in Less Than Two Months
This is Tether’s second $1 billion issuance of USDT in under two months. The stablecoin issuer previously released a similar amount in April 2023.
The newly issued USDT tokens will be held in Tether Treasury and are "authorized but not yet issued," thus not affecting its total market capitalization.
Earlier, in late March 2023, taking advantage of rival stablecoins like BUSD—which fell out of the top 10 by market cap and faced a U.S. government ban on issuance—and USDC—whose $3.3 billion in assets were held at Silicon Valley Bank and faced a decrease in market cap—Tether seized the opportunity by issuing an additional $5 billion USDT from March 15 to March 21, 2023.
In its latest report from early June, Tether set a new record by surpassing $83.2 billion in market capitalization. According to DefiLlama data, USDT’s current market cap constitutes 65.05% of the total stablecoin market cap, making it the largest stablecoin issuer across all blockchains.
Market Cap Trends of Stablecoins Since Early 2023
Source: DefiLlama
In Q1 2023, Tether reported a profit of $1.5 billion, doubling previous forecasts. The stablecoin issuer also committed to allocating 15% of its profits towards accumulating Bitcoin to further bolster its reserves.
Recently, Tether has also been known as an investor in promising crypto companies. Their participation is noted in a $250 million funding round for Volcano Energy, a Bitcoin mining startup in El Salvador.
