- Tether issues 1 billion USDT
- According to Tether’s CTO, this is an “authorized but unissued” amount
- Will the new USDT be put into circulation or remain in reserve status?
Tether has authorized the issuance of 1 billion USDT on the Ethereum network, which remains unissued and reserved for future demand and cross-chain swap requirements.
More About the 1 Billion USDT Issuance
We have received a statement from Tether CTO Paolo Ardoino, in which he provides important clarifications regarding the issuance of 1 billion USDT:
“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.”
From this, it is reasonable to understand that the 1 billion USDT has not yet been put into circulation but is ready to be used as needed, indicating a likely preparation to support large demand and provide liquidity to the crypto market. This should allow Tether to quickly respond to potential client requests without the need to mint new tokens at the last moment, helping to maintain the system’s operational stability.
Nevertheless, this is a significant amount of liquidity, which, if released into circulation, could impact the price of crypto assets such as Bitcoin, Ethereum, and others on both spot and derivatives markets. Although the issuance itself does not guarantee volatility, it often serves as an indirect indicator of general market sentiment and may coincide with periods of corrections or stagnation.
For example, in May 2021, the market was already overheated after Bitcoin’s sharp rise to $64K, but the issuance of new USDT slowed — and this coincided with the subsequent price crash down to $30K. Thus, while it was not the main driver, as there was already a significant decline in spot and derivatives market activity, the slowdown in USDT issuance served as a bearish signal.
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Similarly, can the issuance of 1 billion USDT be considered a potential bullish signal if it is accompanied by active use of these funds to meet real demand?
Technically yes, but it can work both ways — aiming to satisfy presumed demand not only for Bitcoin purchases but also for liquidations of major cryptocurrencies amid ongoing economic and political uncertainty. It is also important to consider that the issuance of 1 billion USDT is not a trigger by itself and must be assessed alongside several factors that should be closely monitored:
- whether there will be an actual release of this amount into circulation;
- whether it is accompanied by increased demand from institutional and retail investors;
- the overall market sentiment and macroeconomic conditions.
Conclusion
Undoubtedly, this is a major issuance and even the fact that it currently remains “authorized but not issued” is already a significant event. Of course, it is necessary to take into account the broader context in which this is happening, but it should definitely not be overlooked. Stay tuned for updates, be adaptive in the rapidly evolving technological and crypto landscape, and keep your strategy grounded and balanced.
