Tether Treasury produced another 1B ‘authorized but not issued’ USDT on December 25, evoking uncertainty from the community.
Tether, the operator of the eponymous Tether, the globe’s biggest stablecoin, has generated another one billion USDT. According to Paolo Ardoino, the chief executive officer, the USDT is ‘approved but not issued.’
On Christmas day, Whale Alert, a blockchain tracking platform, took to X (formerly Twitter) to notify people that Tether Treasury had generated a billion USDT ($1B). Afterward, Paolo responded by claiming this transaction was an ‘inventory recharge’ on the Ethereum blockchain.
Tether Confirms 1 Billion USDT Meant to Replenish Inventory
Using a public service announcement in the Whale Alert’s X thread, he said this was an approved but not issued transaction. This means the amount is going to be utilized as inventory for the subsequent period issuance requests as well as chain swaps.
Inventory replenishment entails requesting stock from suppliers to meet client demand and prevent scarcity without amassing extra inventory. Regarding Tether, this process entails generating new USDT stored as ‘authorized but not issued’ USDT.
According to Tether’s FAQ, the tokens are not included in USDT’s overall market capitalization since they are yet to be released or circulated. Tether Transparency page’s data shows that as of December 26, USDT worth $925M was ‘authorized but not issued.’
Ardoino’s most recent PSA reflects the language of an earlier 1B USDT generation in September this year. At this time, Whale Alert identified an identical transaction.
At that time, the CEO also claimed that the USDT transaction was an authorization rather than real issuance. The assigned amount was meant to be used as inventory for future chain swaps as well as issuance requests on the Tron platform.
A number of online industry watchers have doubted Ardoino’s most recent PSA and the absence of transparency linked to Tether’s approved but not issued transactions. For instance, one commenter wrote that evaluating the agreement or document and learning more regarding the person behind this marvel of generating 1B USDT out of nowhere would be interesting. They also asked if Ardoino is one of those behind these kinds of decisions.
Tether Faces Allegations of Pumping Bitcoin Prices
Further, some doubters asserted that this USDT mint might be utilized to increase Bitcoin’s price, while others have associated Tether’s USDT generation with Bitcoin price pumping. Another commenter replied that the minting was meant to pump Bitcoin.
Over the past year, Tether has experienced considerable growth. In this case, its market cap hit all-time highs. Data from CoinGecko shows that since the start of 2023, its market value has risen by almost 38%, increasing from $66B to $91B. At the time of writing, Bitcoin traded at $42760, an almost 2% reduction in the past 24 hours.
As the lead stablecoin issuer, Tether is set to play a critical role in 2024 particularly after the approval of spot Bitcoin ETF. However, the executives are noncommittal on whether the ne USDT mint is to serve such course.
Last month, Tether linked the growth of USDT to two main reasons. One of them was the constant enthusiasm in the market regarding the probable sanctioning of a spot Bitcoin exchange-traded fund (ETF). The company has been actively shifting to Bitcoin-associated activity in 2023, revealing intentions to begin the purchase of Bitcoin to manage reserves and introduce several Bitcoin mining activities.