Tether authorizes 1 billion USDT to replenish reserves for cross-chain token swaps

The issuer of stablecoins, Tether, authorized 1 billion USDT for issuance with the aim of “inventory replenishment” to support token swaps across different blockchains.

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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

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This marks the second such tranche of that size. The first was in April.

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“Tether periodically works with various third parties (exchanges, hedge funds, etc.) to help them balance liquidity of USDT across different networks,” — explained Tether’s CTO Paolo Ardoino.

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According to him, platforms may face a situation where a large portion of USDT ends up in one blockchain, while they need to process withdrawals in another. For such cases a cross-chain swap may be required.

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The issued stablecoins remain in Tether’s treasury in the status of “authorized but not issued”. They are not included in the market capitalization.

\n\n\n\nEarlier in May 2023, Ardoino said that Tether is exploring new directions for its business due to high profitability.

In early June, USDT’s total market capitalization hit a record high of $83.4 billion.