Tether Creates $1 Billion in USDT as 'Stock Replenishment,' Says CEO Paolo Ardoino
Tether, the company behind the renowned stablecoin, has generated an additional billion USDT as "authorized but not issued".
Tether, the company behind the world's largest stablecoin by the same name, recently created an additional billion USDT, described as "authorized but not issued" by CEO Paolo Ardoino.
Noticed first by Whale Alert on X (formerly Twitter) on Dec. 25, the alert indicated that Tether Treasury had created 1 billion USDT ($1 billion). Ardoino clarified on the platform, explaining that this was a "stock replenish" on the Ethereum blockchain, indicating these tokens are prepared in advance to meet future issuance requests and facilitate swaps between blockchains but are not yet active in the market.
In the context of Tether, replenishing inventory means creating new USDT that are held as "authorized but not issued" in Tether's treasury. This process is similar to traditional finance practices where companies order stock in advance to meet future demand without overstocking. Tether's official FAQ notes that these tokens do not contribute to the total market capitalization of USDT until they are issued and enter circulation.
As of Dec. 26, 2023, data from the Tether Transparency page shows $925 million in USDT as "authorized but not issued" on Ethereum.
Ardoino has previously made similar announcements, like during a 1 billion USDT mint in September 2023, specifying then too that the tokens were for future issuance requests and chain swaps on the Tron network.
However, Ardoino's announcements and Tether's practices of minting large amounts of USDT have faced scrutiny and skepticism from some community members. Critics have questioned the transparency of these "authorized but not issued" transactions and speculated on their potential impact on Bitcoin's price, with some suggesting a direct correlation between USDT minting and Bitcoin price movements. One commenter even called for a more detailed explanation of the process and the individuals responsible for these significant financial decisions.