Tether’s USDT Surpasses $100 Billion in Circulation, Becoming the First Stablecoin to Reach This Milestone
Tether Holdings’ USDT stablecoin token has achieved a significant milestone by briefly exceeding $100 billion in circulation and market capitalization. This makes it the first stablecoin to reach such a size. Tether’s USDT aims to maintain a one-to-one value with the US dollar and has experienced a circulation increase of over 9% since the beginning of the year. The growing demand for Bitcoin, which is currently trading at its highest value in over two years at $66,000, has been a driving factor behind this growth.
USDT Market Share Reaches 70% and Exceeds $100 Billion in Circulation
According to data from CoinGecko, Tether’s USDT briefly reached $100.2 billion in circulation before settling around $99.5 billion. Tether dominates the stablecoin sector with approximately 70% market share out of the total $142 billion market cap. Its closest competitor, Circle’s USDC, holds 19.4% market share.
A Bloomberg report reveals that Tether’s stated reserves for USDT reached $97 billion in December, with over 76% of those reserves allocated to short-term US Treasury bills. Rising yields on these assets have significantly contributed to Tether’s profitability.
In addition, Tether reported excess capital of $2.85 billion in December, which it utilized for investments in industry research, Bitcoin mining, and other areas. Tether’s Chief Executive Paolo Ardoino plans to expand further in these areas in 2024, allocating approximately half a billion dollars solely for funding Bitcoin mining activities.
However, Tether has faced public controversy and regulatory scrutiny due to concerns about transparency regarding its reserves and corporate structure. In 2021, the company settled allegations by a US watchdog and paid over $40 million for providing misleading information about its collateral pile. Tether has since published quarterly attestations of its reserves with a third-party accounting firm to provide some insights into its holdings.
Additionally, Tether has been criticized for the potential use of USDT in terrorist financing and human trafficking, particularly in Asian markets. The involvement of organized crime groups in China using Tether for illegal betting operations was highlighted in a January report by the United Nations Office on Drugs and Crime. Tether has expressed its commitment to combating the criminal use of cryptocurrencies.
Tether Introduces Blockchain Recovery Plan
Tether is developing a robust blockchain recovery tool to ensure uninterrupted accessibility and security for its users. This tool will operate independently of specific blockchains, allowing Tether to utilize multiple blockchains as a transport layer while maintaining the stability and availability of USDT.
The newly introduced blockchain recovery tool enables affected users to initiate the migration process through a user-friendly interface if a supported blockchain becomes unresponsive, unreliable, or unusable. This interface will be accessible via web or command-line tools, providing a seamless experience for Tether users.
To verify ownership of USDT on an unresponsive blockchain, users can cryptographically sign a migration request and specify a recipient address on another supported blockchain to which the USDT will be transferred. The migration process is designed to be user-centric, supporting popular browser extension wallets and hardware wallets such as Ledger or Trezor.
Hot Take: Tether’s USDT Becomes First Stablecoin to Surpass $100 Billion in Circulation
Tether Holdings’ USDT stablecoin token has achieved an impressive milestone by surpassing $100 billion in circulation and market capitalization. This makes it the first stablecoin to reach this size. Tether’s USDT maintains a one-to-one value with the US dollar and has experienced significant growth driven by the demand for Bitcoin. With a market share of 70% in the stablecoin sector, Tether dominates the market. However, the company has faced scrutiny and controversy regarding transparency and potential criminal use of USDT. Nevertheless, Tether is taking steps to ensure user security and accessibility through its blockchain recovery plan.
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