According to a tweet by @whale_alert, a service that tracks large cryptocurrency transactions, one billion USDT was minted on the Ethereum network, which could indicate a spike in demand for the token.
— Whale Alert (@whale_alert) April 20, 2023
However, Paolo Ardoino, CTO of Bitfinex and Tether, immediately clarified that printing is not an issue but an inventory update.
Ardoino explained that the amount will be used as inventory for the next period of blockchain issuance and exchange requests, meaning it will be transferred to other blockchains or exchanges as needed.
PSA: 1B USDt inventory replenished on Ethereum Network. Note this is an authorized but not issued transaction, meaning that this amount will be used as inventory for the next period of issuance requests and chain swaps.
— Paolo Ardoino ? (@paoloardoino) April 20, 2023
He also says that this is an authorized but not published transaction, which implies that the backup supports it.
Tether claims to maintain a 1:1 peg to the US dollar by holding equivalent reserves in bank accounts.
Nevertheless, the project has been controversial in recent times, with critics questioning its transparency and solvency, especially after a legal settlement with the Attorney General of New York (NYAG) revealed that Tether was not fully supported at some points.
In addition, Tether became the target of criticism after a Wall Street Journal investigation stated that its partners used fake documents to gain access to bank accounts.
According to the investigation, Tether used cover companies to gain access to the banking system in 2018.
Tether Moves to Dominate Stablecoin Market
This latest USDT minting coincides with increased competition in the crypto sector, where Tether aims to lure investors away from other stablecoins.
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