Tether Treasury minted another one billion “authorized but not issued” USDT on Christmas Day, triggering some skepticism from the community.
A Glimpse into the Minting Process
Tether, the operator of the world’s largest stablecoin, the eponymous Tether, has minted another billion USDT, which is “authorized but not issued,” according to CEO Paolo Ardoino.
Notifying the Public
Blockchain tracking platform Whale Alert took to X (formerly Twitter) on Dec. 25 to alert users that Tether Treasury had minted one billion USDT ($1 billion).
CEO Ardoino Clarifies
Tether CEO Ardoino subsequently responded with a public service announcement in the Whale Alert’s X thread, stating that the transaction was an “inventory replenish” on the Ethereum blockchain.
Understanding Inventory Replenishment
In traditional finance, inventory replenishment is the process of ordering stock from suppliers in time to meet customer demand and avoid stock shortages without stockpiling surplus inventory. In Tether’s terms, inventory replenishment is the process of creating new USDT that are stored in Tether’s treasury inventory as “authorized but not issued” USDT.
“These tokens are not part of the total market capitalization of USDT, as they have not been issued or released into circulation yet,” Tether’s FAQ reads.
Historical Context and Skepticism
Ardoino’s latest PSA echoes the language of a previous one billion USDT mint in September 2023, when Whale Alert flagged a similar transaction. Some online industry watchers have expressed skepticism about Ardoino’s latest PSA and lack of transparency associated with Tether’s authorized but not issued transactions.
The Ripple Effect on Bitcoin
Some skeptics also argued that the latest USDT mint will likely be used to increase the price of Bitcoin, as some industry observers have linked Tether’s USDT minting to BTC price pumping.
Tether’s Growth Trajectory
Tether has posted significant growth over the past year, with its market capitalization hitting new all-time highs through 2023. Tether’s market value has increased nearly 38%, surging from $66 billion to $91 billion, according to data from CoinGecko.
In November 2023, Tether attributed USDT’s growth to two main reasons, including the continued market excitement around the possible approval of a spot Bitcoin exchange-traded fund. The firm has been actively moving into Bitcoin-related activity this year, disclosing plans to start buying Bitcoin to manage its reserves and launching multiple BTC mining operations.