TL;DR
- Tether issues $1 billion in USDT on Tron.
- Over the past year, Tether has issued $33 billion worth of USDT, spread across Tron and Ethereum.
- Tron issuance is in response to high demand and maintenance of USDT inventory.
Stablecoin issuer Tether has conducted a new issuance of $1 billion worth of USDT on the Tron network, increasing the total tokens issued in the past year to $33 billion.
This transaction, recorded on August 20, marks a significant boost in the supply of USDT on the Tron network, a move that reflects both continued demand and Tether’s liquidity management strategy.
The company has used its treasury wallet to carry out this issuance, in order to maintain an adequate balance between the supply and demand of its stablecoin.
Over the past year, USDT distribution has been considerably high, with $19 billion minted on the Tron network and $14 billion on Ethereum.
This diversification strategy in token issuance highlights the crucial role that both blockchains play in the stablecoin ecosystem.
The recent issuance on Tron follows a similar operation on Ethereum, carried out on August 13, which also consisted of an addition of $1 billion in USDT.
Tether has explained that these operations are part of an inventory repositioning process, designed to ensure a sufficient supply of USDT that will be available for future requests and cross-chain swaps.
Inventory management in the context of stablecoins works similarly to traditional businesses: reserves are built up to ensure there is enough supply available to meet demand without the need to immediately release tokens into the market.
This allows Tether to manage liquidity more effectively, avoiding wild fluctuations in the USDT supply.
Liquidity Management Strategy and Tether Demand on Tron
Tether has not provided specific details regarding the purpose of the new $1 billion issuance on Tron, but it can be inferred that it has the same goal as the issuance on Ethereum: to maintain liquidity and adequate supply on the Tron network, which currently leads the stablecoin market.
According to Coin Metrics data from August 16, Tron controls 37.9% of the total stablecoin market, with an impressive total of over $61 billion worth of stablecoins on its blockchain.
The high demand for USDT on Tron is reflected in Tether’s transparency data, which shows that its treasury had just $36 million worth of authorized but unissued USDT on Tron as of August 19.
This situation indicates that Tether may be adjusting its supply to suit market needs on this specific network.
Constant inventory adjustment and token issuance are crucial to maintaining balance in the stablecoin market and ensuring that Tron users can continue to use USDT without interruption.
