Paolo Ardoino, CEO of Tether, the issuer of the world’s most recognized stablecoin, USDT, announced the minting of one billion “authorized but not issued” USDT tokens. This revelation came after Whale Alert, a blockchain tracking platform, reported on December 26 that Tether Treasury minted $1 billion USDT on December 25.
In response to Whale Alert’s disclosure, Ardoino clarified that the transaction was an “inventory replenishment” on the Ethereum blockchain. He emphasized that these tokens are authorized for future issuance demands and chain swaps, and should not be confused with an actual release into the market.
The concept of inventory replenishment in traditional finance involves ordering stock from suppliers in a timely manner to meet customer demand and prevent shortages. Tether defines this process as creating new USDT that is stored as “authorized but not issued” in Tether’s treasury inventory, which is not part of USDT’s total market capitalization as they are not yet in circulation.
As of December 26, 2023, Tether’s transparency page showed 925 million USDT as “authorized but not issued” on Ethereum. Ardoino’s statement aligns with a similar explanation he gave in September 2023 regarding another one billion USDT transaction uncovered by Whale Alert, which he stated was an authorization for upcoming issuance demands on the Tron network.
However, some market observers and organizations have expressed skepticism regarding Ardoino’s recent statements and Tether’s “authorized but not issued” transactions. Critics have called for a closer examination of the documents and agreements responsible for this “Christmas miracle” of creating one billion USDT out of thin air.
Amidst the doubts, there are also positive speculations suggesting that the recent USDT minting could be used to support Bitcoin prices. Some cryptocurrency enthusiasts have linked Tether’s USDT printing to BTC price surges. In November 2023, Tether attributed the growth of USDT to legitimate reasons, including the anticipation surrounding the approval of a spot Bitcoin exchange-traded fund expected in January.
