Tether Treasury Mints Another $1B USDT for Inventory Replenish
Stablecoin project Tether recently issued 1 billion new USDT tokens on Christmas Day. However, the move led to criticism from investors. As per CEO Paolo Ardoino, the newly minted USDT amount is authorized but not issued for trading for now.
The notification regarding the new token generation was mentioned on the social media digital asset tracker Whale Alert.
Inventory Replenish Program
As per the notification, Tether minted $1 billion worth of new USDT tokens. Ardoino responded to the tweet claiming that the transaction was part of the inventory replenishment program for the Ethereum blockchain.
He further noted that the amount will be utilized as inventory to complete the issuance requisition and network swaps. Inventory replenishment is a term used in traditional finance to generate new stock requisition based on market demand and prevent shortages or surplus.
Demand for USDT Tokens
As per Tether FAQs, the tokens are not added to the overall market capitalization of USDT and they are not issued to the traders on spot markets. A notification added to the Tether Transparency page noted that around $1 billion worth of USDT has been authorized but not released as of 26th December 2023.
The Whale Alert account notified a similar transaction in September this year about 1 billion USDT tokens minted. As per the executive, the USDT transaction was authorized but not actually issued. He also noted that the minted USDT stablecoins were added to the inventory rather than for requisition requests from the Tron network.
However, USDT investors have taken up an issue with the lack of transparency regarding PSA from Ardoino. One online user retained that the investor should read the document or agreement to learn more about the minting of additional 1 billion USDT tokens on Christmas day.
Furthermore, the social media user asked if Ardoino was authorized to make the decision to mint more USDT stablecoins. On the other hand, there are some speculations that additional USDT tokens will be used to inflate Bitcoin prices based on previous accounts of new USDT minting with Bitcoin price appreciation.
Tether Explains Reasons Behind Newly Minted USDT Tokens
Tether market cap registered an ATH during 2023. Since the start of the ongoing year, USDT market value has risen by 38% as per CoinGecko’s report. At the same time, Bitcoin prices have continued to trade at the $42K area recording 2% increase during the last 24 hours.
In November, Tether USDT gained momentum on account of two reasons. The first one is the anticipation around Bitcoin spot ETF. The stablecoin has accumulated a sizeable amount of Bitcoin to the backing reserves and launched various Bitcoin mining projects.
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