- Needed to rebalance liquidity
- The lion’s share of stablecoins is destined for Binance
- The exchange transferred 750 million USDT to another network
Tether has authorized 1 billion USDT ERC-20 on the Ethereum blockchain. The purpose of the operation is to replenish reserves and support swaps in various networks.
This is the second such transaction for a large amount. Previously, Tether made a similar transfer in April. CTO Paolo Ardoino explained:
“Tether periodically works with various third parties (exchanges, hedge funds, etc.) to help them rebalance USDT liquidity on the networks. Platforms may find themselves in a situation where most USDT goes to one blockchain while payouts need to be processed on another. In such cases, cross-chain swaps may be required.”
Issued stablecoins remain in the Tether vault as “authorized but not issued.” They are not included in the capitalization calculation.
Later Binance exchange announcedthat, with the help of the Tether team, will transfer 750 million USDT TRC-20 to the USDT ERC-20 network. They warned users in advance not to panic about large transactions from the exchange’s hot wallets. User funds remain safe.
In the meantime, customers have other reasons to panic. Binance.US stated that the asset freeze threatens the exchange with liquidation. They urged the court not to take such steps.