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Tether CEO Explains ‘Authorized but Not Issued’ USDT Transaction

Tether mints $1B 'authorized but not issued' USDT, sparking debate on crypto market impact and transparency in reserve management.
Tether CEO Explains ‘Authorized but Not Issued’ USDT Transaction

On December 25th, Tether, the entity behind the world’s largest stablecoin, USDT, took a significant step to bolster its reserves. CEO Paolo Ardoino confirmed that Tether Treasury has minted an additional one billion USDT, a move described as ‘inventory replenish’ on the Ethereum blockchain.

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Understanding Tether’s Inventory Strategy

This recent action by Tether involves creating USDT that remains in Tether’s treasury as ‘authorized but not issued’. In addition, it means these tokens are not yet active in the market circulation. 

Ardoino clarified that this reserve is in preparation for future issuance demands and chain swaps. This mechanism is somewhat akin to traditional finance’s inventory replenishment, where companies maintain an optimal stock level to meet upcoming demands without hoarding excess.

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Market Reaction and Speculations

Blockchain tracking platform Whale Alert initially reported this development, sparking various reactions in the crypto community. While some see this as a standard operational procedure, others expressed skepticism. Questions arose about the transparency of such transactions and their potential impact on the broader cryptocurrency market, including Bitcoin’s price dynamics.

Despite these mixed reactions, Tether has shown remarkable growth over the past year. Its market capitalization surged nearly 38% since January 2023, reaching $91 billion according to CoinGecko data. Tether’s aggressive expansion into Bitcoin-related activities, including mining operations and reserve management, underscores its influence in the cryptocurrency space.

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A Balancing Act in Crypto Finance

Tether’s strategy highlights the delicate balance crypto financial entities must maintain. They need to ensure sufficient reserves for stability while fostering growth and adapting to the ever-evolving market demands. As the crypto world continues to intertwine with traditional finance, actions like Tether’s minting of USDT play a crucial role in shaping the industry’s future trajectory.

Read Also: Terra Luna Classic Community Turns Down Major Burn Proposal

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Kelvin Munene Murithi

Kelvin Munene is a crypto and finance journalist with over 5 years of experience, offering in-depth market analysis and expert commentary . With a Bachelor's degree in Journalism and Actuarial Science from Mount Kenya University, Kelvin is known for his meticulous research and strong writing skills, particularly in cryptocurrency, blockchain, and financial markets. His work has been featured across top industry publications such as Coingape, Cryptobasic, MetaNews, Cryptotimes, Coinedition, TheCoinrepublic, Cryptotale, and Analytics Insight among others, where he consistently provides timely updates and insightful content. Kelvin’s focus lies in uncovering emerging trends in the crypto space, delivering factual and data-driven analyses that help readers make informed decisions. His expertise extends across market cycles, technological innovations, and regulatory shifts that shape the crypto landscape. Beyond his professional achievements, Kelvin has a passion for chess, traveling, and exploring new adventures.

Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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