Tether $1B USDT for ‘Inventory Replenishment’ – CEO Paolo Arduino
Tether (USDT), the world's largest stablecoin operator, has released another billion dollars, which is “authorized but not issued,” CEO Paolo Arduino said.
Blockchain monitoring platform Whale Alert announced on December 25 (formerly Twitter) that it has raised one billion USDT ($1 billion) to alert users.
Tether CEO Arduino subsequently responded with a public service announcement in the Whale Alert X thread, stating that the transaction was an “inventory replenishment” on the Ethereum blockchain.
“Note that this is an approved but not issued transaction, which means that this amount will be used as a buffer for future withdrawal requests and on-chain exchanges,” Arduino said.
In traditional finance, inventory replenishment is the process of ordering stock from suppliers in time to meet customer demand and avoid stock shortages without stockpiling excess inventory. In Tether terms, inventory replenishment is the process of creating new USDT in Tether's treasury stock as “authorized but not issued” USDT.
Tether's FAQ states that “these tokens are not part of USDT's total market capitalization, as they have not yet been released or put into circulation.”
According to data from Tether's transparency page, $925 million in USDT was “authorized but not issued” in Ethereum as of December 26, 2023.
Arduino's latest PSA echoes the language of its previous $1 billion bid in September 2023, when Well Warning pulled off a similar transaction. In that case, Arduino said that the USDT transaction permit, not the actual issue, was set aside to serve as an on-chain exchange for future audit requests and on the Tron network.
Some online industry watchers have expressed skepticism about Arduino's recent PSA and the lack of transparency associated with Tether's authorized but unissued transactions.
“It would be interesting to examine the document or the agreement and learn more about the individuals responsible for this Christmas miracle of $1 billion out of thin air,” said one commenter, asking if Arduino was one of the individuals responsible for such decisions.
Some skeptics have argued that the recent USDT minting could be used to boost the price of Bitcoin (BTC), with some industry observers linking Tether's USDT generation to BTC inflation.
“Say directly that you want to withdraw BTC,” one commenter responded in the thread.
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Tether has experienced significant growth over the past year, with its market capitalization set to reach a new all-time high by 2023. Since January, Tether's market cap has increased nearly 38%, from $66 billion to $91 billion, according to CoinGecko data. At the time of writing, Bitcoin is trading at $42,760, down 2% in the last 24 hours.
In the year In November 2023, Tether attributes USDT growth to two main factors, one being the continued market excitement surrounding the approval of a Bitcoin exchange-traded fund. The company has been active in Bitcoin-related activity this year and has announced plans to manage its inventory and launch several BTC mining operations.
A spokesperson for Tether did not immediately respond to Cointelegraph's request for comment.
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