Tether, a prominent issuer of stablecoins, has rapidly increased its issuance of USDT tokens, with a remarkable 4 billion USDT issued in just one month. This surge includes 1 billion USDT on Tron and 1 billion on Ethereum, alongside previous batches on Tron and Ethereum. Tether's CEO Paolo Ardoino explained that this issuance is meant for inventory purposes and chain swaps. In 2023, Tether is on track to mint approximately 22.75 billion USDT, with the majority issued on Tron. Tether has also conducted token burnings in the past. Cryptocurrency enthusiasts closely monitor these actions, with some recalling past market turbulence related to Tether minting. The company has also teased the introduction of five new projects in 2024, hinting at potential disruptions in the Web2 centralized services.
Meanwhile, U.S. lawmakers have introduced the CLARITY Act, aimed at preventing federal government officials from conducting business with Chinese blockchain companies, and specifically prohibiting transactions with iFinex, the parent company of Tether. The bill also restricts government employees' use of China-based blockchains underpinning cryptocurrency trading platforms. The legislation seeks to safeguard national security intelligence and citizens' private information, as blockchain technology is expected to store sensitive data for all Americans in the next decade. Although the bill's authors are not prominent in the House of Representatives, their proposal reflects growing U.S. concerns about Chinese involvement in the cryptocurrency industry. It comes as part of broader efforts to address security and privacy issues in the blockchain space and follows previous actions such as the ban on government employees' use of TikTok due to security concerns related to its Chinese ownership.
Major Stablecoin Issuer Tether Mints 4 Billion USDT in a Month
Tether, one of the leading issuers of stablecoins, has ramped up its USDT token minting efforts, creating a buzz in the cryptocurrency world. The company has issued a staggering 4 billion USDT tokens over the past month, with a recent billion-dollar minting on the Tron blockchain, as reported by blockchain data provider Whale Alert.
This swift minting spree included 1 billion USDT issued on Tron on Nov. 10 and another 1 billion on Ethereum on Nov. 9. Additionally, Tether had previously issued 2 billion USDT in two separate batches on the Tron blockchain on Nov. 3 and Oct. 19, all according to data from Whale Alert.
Tether's Chief Technology Officer and newly appointed CEO, Paolo Ardoino, responded to the Whale Alert data on X (formerly Twitter). He clarified that the most recent 1-billion-USDT transaction on the Tron network was an "authorized but not issued transaction," meant to serve as inventory for future issuance requests and chain swaps.
These recent issuances constitute a substantial portion of the total USDT tokens minted in 2023. According to Whale Alert data, Tether has minted approximately 22.75 billion USDT this year, with 57% issued on the Tron blockchain, totaling 13 billion USDT, and the remaining 9.75 billion USDT on the Ethereum blockchain.
Tether's active minting activity in the past year has garnered attention in the cryptocurrency community. In March 2023, Tether minted a staggering 9 billion USDT tokens, following an additional 3 billion minted in the previous month, as indicated by Whale Alert data. The company also minted a substantial amount of USDT during the summer months, issuing 3.75 billion USDT between Jun. 12 and Jul. 12.
Interestingly, alongside these active minting operations, Tether has also conducted token burnings. On Aug. 22, Tether burned 1.2 billion USDT on the Tron blockchain. Earlier, in June, the stablecoin issuer had burned 3.1 billion Tron-based USDT, followed by 2 billion Ethereum-based USDT in February, as confirmed by Whale Alert.
This rapid pace of minting and burning USDT tokens has not gone unnoticed, with some cryptocurrency enthusiasts drawing parallels to past market events. One user on X noted, "Last time this much Tether got printed in a week, a whole bank blew up," referring to banks such as Silicon Valley Bank, Silvergate, and Signature Bank that ceased operations in March 2023.
Following these bank implosions, there were speculations about potential exposure between Tether and Signature Bank. Tether swiftly denied such allegations, "unequivocally re-iterating" that it had no exposure to Silvergate, Silicon Valley Bank, or Signature Bank.
Apart from these activities, Tether's CEO Paolo Ardoino hinted at the company's broader ambitions. Ardoino took to Twitter to announce that Tether is gearing up to unveil five new projects in 2024, with some having the potential to disrupt popular centralized services associated with Web2. While details remain scarce, these announcements have generated significant interest within the cryptocurrency community, eager to see how Tether plans to shape the future of the cryptocurrency landscape.
As Tether continues to make waves in the world of stablecoins and digital currencies, its actions are closely monitored by both cryptocurrency enthusiasts and market regulators, underscoring the growing significance of stablecoins in the broader cryptocurrency ecosystem.
New Bill Blocks U.S. Officials from Engaging with Chinese Blockchain Firms and Tether Parent Company
In a significant move, U.S. lawmakers introduced the Creating Legal Accountability for Rogue Innovators and Technology (CLARITY) Act last Wednesday, which seeks to prohibit federal government officials from conducting business with Chinese-based blockchain companies. This legislation, led by U.S. Representatives Zach Nunn (R-Iowa) and Abigail Spanberger (D-Va.), also explicitly bars U.S. government officials from transacting with iFinex, the parent company of Tether, the issuer of the world's largest stablecoin, USDT.
The CLARITY Act goes beyond preventing transactions and also restricts government employees' use of China-based blockchains, which serve as the underlying infrastructure for various cryptocurrency trading platforms. The bill is part of a broader effort by the U.S. government to address concerns regarding national security and data privacy in the context of blockchain technology and its applications.
While neither of the bill's authors holds prominent positions within the U.S. House of Representatives or on key committees, their proposal represents another step in the U.S. government's evolving stance toward Chinese involvement in the cryptocurrency industry. Some senior lawmakers have already been pushing for various cryptocurrency-related bills, including those focusing on security issues. Several of these bills have received committee approval and are further along in the legislative process, potentially making it challenging for the CLARITY Act to leapfrog them in terms of priority.
The primary objective of the CLARITY Act is to safeguard the nation's critical national security intelligence and the private information of American citizens by preventing "foreign adversaries" from gaining access through blockchain technology. The lawmakers behind the bill emphasized that blockchain technology is poised to store sensitive private data for every American in the next decade, and China's substantial investments in this infrastructure pose a significant national security and data privacy concern.
Representative Nunn, who joined the House this year as a freshman member, stated, "Within the next decade, every American will have sensitive, private data stored using blockchain technology, so China's heavy investment in this infrastructure poses a colossal national security and data privacy problem."
The legislation also targets specific Chinese blockchain entities, including The Spartan Network, The Conflux Network, and Red Date Technology Co., which is known for its role in China's national blockchain project and the development of the digital yuan, China's central bank digital currency (CBDC). However, Red Date Technology Co. swiftly responded to the bill, clarifying that the BSN Spartan Network primarily serves traditional IT purposes and is not related to cryptocurrencies. The company also extended an invitation to U.S. agencies to examine their source code for further details.
"The BSN Spartan Network is completely open source, and we welcome agencies from the US or any government to review the source code and make their own conclusions about the technology. The Singapore-based BSN Foundation, with members from the USA, Europe, and Asia, governs the Spartan Network, which is completely separate from the BSN Networks in Mainland China," the company stated.
In addition to imposing transaction restrictions, the CLARITY Act directs the U.S. Secretary of the Treasury, Secretary of State, and the Director of National Intelligence to collaborate on a plan aimed at mitigating the risks associated with the development of blockchain technologies by China and other foreign adversaries.
This legislative proposal follows a similar approach to the U.S. government's action this summer when it imposed a security-driven ban on government employees' use of TikTok, a popular social media app with Chinese origins. This move was prompted by allegations made in court filings earlier in the year by a former employee of TikTok's parent company, ByteDance, who claimed that the Chinese Communist Party had utilized a secret "backdoor" in the platform to monitor activists' activities in Hong Kong in 2018.
Despite recording a slight 24-hour loss of 0.3%, USDT continued to trade at $1, according to data from CoinStats.
Price chart for USDT (Source: CoinStats)
Meanwhile, USDT’s market cap was estimated to be $88 billion. The leading stablecoin also recorded approximately $36 billion in 24-hour trading volume.