Tether’s USDT Minting Goes Into Overdrive: A Boost for DeFi?
Tether has recently created $1 billion worth of USDT on the TRON network, adding to the $4 billion in USDT it has minted over the past week.
However, Tether’s frequent minting has raised concerns about the largest stablecoin in the market and its reserves. Tether has responded to such concerns by stating that its supply is backed by its reserves, with BDO confirming that it had $960 million in excess reserves. Additionally, Tether has increased the percentage of its reserves held in Treasury bills to 58%.
As competition in the stablecoin sector intensifies, Tether is attempting to attract investors away from other stablecoins. Tether currently dominates the stablecoin market, and its position is unlikely to change anytime soon.
However, the potential downfall of a stablecoin like USDT could significantly impact the market.
Recent reports about Tether’s partners using fraudulent documents to provide the company with access to bank accounts have also increased scrutiny on the stablecoin.
Despite these concerns, Tether’s minting has increased demand for USDT, benefiting the DeFi market, where USDT is one of the popular cryptocurrencies. The increased demand for USDT could have a positive cascading effect on Ethereum and its ecosystem.
Furthermore, Tether’s dominance in the stablecoin market is currently at an 18-month high, with almost 60% of the market share. In contrast, USDC has about 27.5% of the market share. Circle’s recent retraction of $3.3 billion from Silicon Valley Bank has contributed to the decline in USDC’s market share.
As the year progresses, the stablecoin market is expected to undergo some changes that are worth keeping an eye on.