Tether announced on Thursday it will coordinate with a third party to perform a chain swap for raising more than 1 billion USDT while keeping the total supply the same. Tether plans to use Tron TRC20 for the swap. The decision came as the USDT plunged to 0.95, destabilizing its Dollar peg.
Just after Tether, Tron’s founder Justin Sun shared on Twitter that Tron DAO Reserve has increased the supply of USDC and TUSD on Tron by $400 million.
Tether Uses Tron TRC20 To Support USDT Peg
The USDT price fell briefly to $0.95 at around 7 AM UTC amid concerns among investors over USDT having the same fate as UST, which lost its peg with the US dollar. The investors started selling USDT and moved to other stablecoins such as USDC, BUSD, and DAI.
However, the quick action from Tether resulted in USDT rising to stable levels. Currently, the USDT is trading at $0.98. Tether converted Tron TRC20 to Ethereum ERC20 for 1 billion USDT and to Avalanche for 20 million USDT. The total supply of USDT remains the same during the swap. It increased the Tron’s liquidity in the market.
Meanwhile, Tron DAO Reserve also took responsibility to reduce volatility for its algorithmic stablecoin USDD by increasing the $400 million supply of USDC and TUSD on Tron. Currently, USDD is trading at $0.98.
The FUD across the crypto market is benefitting some traders as the stablecoins’ price dropped below $1.
Commenting on the USDT price fluctuation, traders Michaël van de Poppe, said:
“The USDT peg is restoring already, which is a good sign. People shouldn’t compare USDT with UST as those are completely different, although the reaction on the markets are because of tremendous fear levels.”
Crypto Market Remains Under Pressure
The crypto market is under pressure amid bearish sentiment among traders. The UST losing its peg and now USDT destabilizing a little bit has spurred fresh fear in the market. In the last 24 hours, the trading volume on USDT has increased by more than 50%. The traders should remain cautious in the current market conditions.
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