An account that monitors the major minting, trading, and token transfer blockchains has flagged a $1 billion USDT grant in Tether’s vaults that will provide near-term USDT liquidity to the Tron network.
Blockchain tracker WhaleAlert highlighted the $1 billion mandate on X (formerly Twitter), which prompted a quick response from Tether CTO Paolo Ardoino, who stated that USDT tokens will be used as inventory to “replenish” the Tron network .
Ardoino added that the event was a grant, not an actual issuance, and the allocated amount will serve as inventory for upcoming issuance requests and chain swaps on the Tron network.
PSA: TRON replenishes 1B USDt inventory. Note that this is an authorized but not issued transaction, which means that this amount will be used as inventory for the next issue issuance request and chain swap.https://t.co/Y1bqxZglgR
— Paolo Ardoino (@paoloardoino) September 19, 2023
According to Tether’s official FAQ page, “authorized but unissued” USDT is required to ensure the security of the token creation and issuance process:
“By creating ‘authorized but unissued’ USDT, Tether limits the number of times Tether’s signers need to access their authorized private keys, thereby reducing the security threats they face.”
After authorizing USDT in the Tether vault, the company can issue USDT immediately upon receipt of customer funds, ensuring that the issuer maintains 100% reserve support.
As Cointelegraph previously reported, USDT tokens issued on the Tron blockchain hit all-time highs in 2023. There are $42.8 billion in USDT tokens circulating on the network, while there are approximately $39 billion in USDT tokens circulating on the Ethereum blockchain.
Tether’s chief technology officer recently explained a similar massive USDT delegation flagged by blockchain trackers, with $1 billion in USDT minted to support an Ethereum chain swap scheduled for June 2023.
Tether has minted approximately $16 billion in USDT since January, and its market capitalization will exceed $83 billion by 2023. USDT remains the leading USD-pegged stablecoin by market capitalization.
In comparison, the market capitalization of Circle’s USDC stablecoin has dropped from $50 billion in early 2023 to $26 billion at the time of publication.
It is said that the collapse of Silicon Valley Bank (SVB) affected the decline in USDC’s market value. By the time of its collapse in March 2023, Circle had frozen $3.3 billion of the institution.
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