KEY POINTS
- Tether Treasury minted a sizable amount of USDT on Monday
- It was for an "inventory replenish," said CEO Paolo Ardoino
- Tether made a similar move in September when it minted 1 billion USDT
Tether, issuer of the world's largest stablecoin by market capitalization of the same name, Tether (USDT), has minted "authorized but not issued" $1 billion in USDT.
Blockchain tracking platform WhaleAlert shared in a post on X Monday that Tether Treasury minted a sizable amount of USDT.
Tether CEO Paolo Ardoino quickly responded to the post, explaining the reason behind the token generation.
The CEO said the newly minted USDT was for an "inventory replenish" within the Ethereum framework and underlined that the mint was an "authorized but not issued transaction."
"1B USDt inventory replenish on Ethereum Network. Note this is an authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps," Ardoino noted.
PSA: 1B USDt inventory replenish on Ethereum Network. Note this is an authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps.
— Paolo Ardoino 🍐 (@paoloardoino) December 25, 2023
The newly minted USDT will not be introduced to the market right away but will serve as reserved tokens for future distribution needs or chain swaps whenever needed.
To maintain liquidity, the newly minted stablecoin will only be deployed into circulation when the demand in the market warrants it.
On its FAQ page, Tether explained that "Tether tokens (USDT) that are 'authorized but not issued' are tokens that are created on a blockchain and sitting in Tether's treasury."
"As these tokens have not been issued, these tokens are not counted as part of the total market capitalization of USDT," it added.
Those labeled as "issued" USDT, on the other hand, are "authorized tokens that have been sold and issued to Tether's customers and in actual circulation." These issued USDT are "fully backed by Tether's reserves," the stablecoin issuer further said.
Moreover, it explained the term "inventory replenishment," noting that it is "the process of creating new USDT that are stored in Tether's treasury inventory as 'authorized but not issued' USDT," before adding, "These tokens are not part of the total market capitalization of USDT, as they have not been issued or released into circulation yet."
It is worth noting that Tether made a similar move in September when it minted 1 billion USDT, which is equivalent to $1 billion.
Ardoino also explained at the time that the mint was an authorization and not an actual issuance and that it was meant to serve as inventory for issuance requests and chain swaps on the Tron network.
💵 💵 💵 💵 💵 💵 💵 💵 💵 💵 1,000,000,000 #USDT (1,000,719,999 USD) minted at Tether Treasuryhttps://t.co/NA4NnBjhyD
— Whale Alert (@whale_alert) September 19, 2023
"PSA: 1B USDt inventory replenish on Tron Network. Note this is a authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps," he said on Sept. 19 after WhaleAlert highlighted the transaction.
