Tether Creates $1B USDT on Tron Blockchain, Prepping for Potential Cryptocurrency Market Rally

Tether, known for issuing the largest dollar-backed stablecoin, has recently created $1 billion USDT on the Tron blockchain.

Stablecoin issuer Tether has created $1 billion in new Tether (USDT) on the Tron blockchain, according to an announcement on Monday.

These tokens are not yet in circulation and are classified as “authorized but not issued,” Tether’s statement reads, adding that this action is part of Tether’s routine inventory management to prepare for potential increases in demand, which often precedes upward movements in the cryptocurrency market.

“These tokens will be quickly allocated and used to meet demand,” Tether’s statement reads.

The distinction of “authorized but not issued” USDT means these tokens exist in Tether’s treasury but are not backed by tangible reserves like the U.S. dollar or other assets. In contrast, circulating USDT tokens are fully backed 1:1 by reserves, according to Tether.

The new Tron-based USDT batch brings the total stablecoin supply on the blockchain to over $60 billion, according to Tron founder Justin Sun. He celebrated this development in a tweet on Monday, highlighting the network’s growth and increasing market capitalization.

“Together, we are making history,” Sun wrote, addressing Tether.

Tron Network Surpasses $60 Billion in USDT Issuance

Both Tether’s USDT and the Tron Network hold substantial sway over cryptocurrency market liquidity and capitalization. Yet, they also face scrutiny from global regulators and investors due to concerns about transparency and operational risks.

This development occurs amidst broader discussions within the industry about stablecoin stability and regulatory oversight, with entities like BlackRock and Circle highlighting potential risks associated with high USDT exposure in the market.

Tron, a high-throughput blockchain, has seen its native token TRX rally by over 160% year-to-date, outpacing gains by Bitcoin and Ether. At the same time, Tron has faced criticism for its blockchain architecture and centralization, which some argue compromises the network’s security and immutability.

Tron’s close relationship with Tether has also drawn attention, with some speculating that the network’s growth is largely fueled by the stablecoin’s presence on the blockchain. Tron’s native token price performance has also been linked to Tether’s creation and circulation.

Tron’s native token priceチャートをたどることで、stablecoin issuer Tether’s activity in creating new USDT on the blockchain becomes evident. As Tether adds more USDT to Tron, TRX tends to rally sharply, followed by periods of consolidation or decline.

This pattern has held true throughout 2023, with TRX rallying sharply in January and early February as Tether created and authorized new USDT on the blockchain. However, the TRX rally stalled in late February as Tether’s new USDT creation slowed down.

Tron’s native token has resumed its rally in March, up over 70% so far this month, as Tether authorized an additional $1 billion in USDT on the Tron blockchain. TRX outperformed both Bitcoin and Ether over the past 30 days, with gains of 160%, compared to 40% and 30%, respectively, for BTC and ETH.

Tron’s market capitalization now stands at $12.2 billion, making it the 14th largest cryptocurrency by market cap, according to CoinGecko. Tron’s market cap ranks higher than several other notable cryptocurrencies, including Chainlink, Polygon and Litecoin.

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