On December 24, Tether minted an additional stablecoins USDT on the Ethereum network.
? ? ? ? ? ? ? ? ? ? 1,000,000,000 #USDT (1,001,100,000 USD) minted at Tether Treasuryhttps://t.co/i3Dqn5tSA6
— Whale Alert (@whale_alert) December 25, 2023
CEO Paolo Ardoino explained the purpose of the coins in a post under Whale Alert on X. According to him, this was an authorised, but not yet issued transaction.
The new ‘stablecoins’ are used ‘as inventory for requests to issue in the next period and chain swaps,’ he clarified.
In traditional finance, replenishing inventories is the process of maintaining reserves by suppliers to meet client demand for a given asset. From Tether’s perspective, this means creating new USDT nominally held in treasury reserves.
\”These tokens are not part of the overall market capitalization of USDT, as they have not yet been issued,\” said the FAQ section of Tether.
According to Tether Transparency, as of December 26 on Ethereum about 925 million USDT are \”authorized but not issued.\”
Previously Whale Alert recorded a similar operation on the Tron network in September. Ardoino also explained this as a replenishment of reserves.
PSA: 1B USDt inventory replenish on Tron 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) September 19, 2023
Since January, Tether has issued roughly 16 billion USDT. At the time of writing, the stablecoin’s market capitalization stands at $91.4 billion (CoinGecko).
Earlier in December it emerged that Tether’s Bitcoin investments had a positive revaluation of $1.1 billion. The issuer’s position in Bitcoin has risen 85% since the purchase.
Earlier in November, media reported that Tether invested $500 million in Bitcoin mining.