Tether Prints $1 Billion in New USDT Tokens

Tether, the company behind the leading stablecoin USDT, raised eyebrows earlier this week. It appeared to mint $1 billion worth of new USDT tokens without having the reserves to back them up. Seeking to calm the controversy, Tether’s CEO Paolo Ardoino assured people that this $1 billion mint was “an authorized but not issued transaction.”

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PSA: 1B USDt inventory replenish on Tron Network. Note this is an authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps.

— Paolo Ardoino 🍐 (@paoloardoino) April 16, 2024

Tether explained that USDT tokens “authorized but not issued” were created on a blockchain like TRON but remained in Tether’s Treasury before public release. These unissued tokens don’t count towards USDT’s total market capitalization.

JUST IN: Another $1,000,000,000 worth of unbacked #Tether $USDT has been printed out of thin air. pic.twitter.com/ZCzJ8kV1zG

— WhaleWire (@WhaleWire) April 16, 2024

At the time of writing, the TRON blockchain held $57.8 billion worth of authorized USDT. However, $1 billion was unissued, resulting in a net circulating supply of $56.8 billion.

Authorized but unissued tokens are common across the 15 blockchains hosting USDT stablecoins. Currently, there is $5.4 billion worth of authorized but unissued USDT tokens. Ardoino commented, “This amount will be used as inventory for next-period issuance requests and chain swaps.”

Tether: $109B USDT Circulating, Excluding $5.4B Unissued Tokens

Subtracting the $5.4 billion unissued tokens, the circulation of USDT stablecoins totalling $109 billion attests to the development of USDTC. In early April, the newly presented USDT $5 billion Tether more than ever before, reaching the peak of its market cap. Although Circle’s USDC has gained some ground recently, Tether still holds a 74% share of stablecoins; it is the backbone of the market.

As the coming US crypto regulation may result in immigrant investors flocking toward more compliant stablecoins, such as USDC, many view USDT as less appealing. Several stablecoin issuers could jump into the market even though small issuers may be denying to gain market share.

Commenting on Tether and Circle’s dominance, Ledn CEO Mauricio di Bartolomeo expects them to cement their lead further, saying: “the regulator will bring that back in it with the only chance we have as much as people are aware of.”

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