Tether announces on-chain swap of $1 billion USDT to ERC20. Tether has also recently clarified that its cash reserves for issuing USDT to Alameda were not on Alameda’s balance sheet.
Stablecoin issuer Tether plans to exchange 1 billion USD in Solana for ERC20 tokens for usage on Ethereum, which is a setback for the Solana ecosystem. Following the announcement, the price of SOL decreased by about 0.03%, and according to DeFiLlama, the Total Value Locked on Solana’s DeFi protocols decreased by 10.95% to $297.73 million.
The trade, according to Tether, will be facilitated by a third party. Prior to the transaction, Solana had USDT worth $1.8 billion, Ethereum around $28 billion, and Tron at about $34 billion. Avalanche, Tezos, Algorand, Near, Polygon, Omni, EOS, Liquid, Statemint, SLP, and Statemine all support Tether’s stablecoin. Solana will now hold about $1.7 billion USDT after the most recent swap.
With a market share of 45.5% and 65.9 billion USDT, Tether is still the top stablecoin issuer. Since the beginning of May, its supply has decreased by 21%. With 44.1 billion USDC in circulation, Circle’s USD Coin maintains its second-place ranking and a market share of almost 30%. Additionally, its supply has decreased by 21% since the start of July.
In contrast, Binance USD, the third-largest stablecoin by market size, has experienced a 30% growth in supply since the start of July. With 22.9 billion coins in circulation, BUSD holds roughly 16% of the market.
Tether Insists There is No Threat From Alameda
The fintech firm explained that USDT is issued on a 1:1 basis when institutional parties send dollars to Tether. It further said that the reserves were not included on Alameda’s balance sheet and were still in Tether’s ownership. There is no collateral supporting Alameda’s USDT on the company’s balance sheet. Alameda’s sole choice is to redeem the USDT and request that Tether restore the dollars.
Tether claims that it does not owe Alameda any unpaid stablecoin debts or other financial obligations. According to the company, the fundamental issue that a great deal of other businesses are currently dealing with is that they carelessly loaned Alameda numerous assets while depending on relatively illiquid collateral. The lack of leverage, the corporation continued, was a major factor in the failure.
