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On December 6, Tether issued an additional 2 billion USD USDT, increasing the reserve that had been built up over months. With this move, the largest capitalized stablecoin issuer, USDT, has completed a series of issuances totaling 19 billion since November 6.
These actions reflect Tether’s dominance in providing liquidity to the cryptocurrency market. However, this has also raised concerns about transparency and systemic risks.
Tether Releases 4 Billion USDT This Week
Blockchain analytics tool Lookonchain reported that Tether issued $2 billion USDT during the final hours of the US session on Friday. This comes just one day after the stablecoin issuer released $1 billion USDT day 5and an additional 1 billion USD USDT two days earlier, added December 3.
“Tether released 2 billion USD USDT again just 6 hours ago! Tether has issued 19 billion USDT on Ethereum and Tron since November 6,” Lookonchain report.
This issuance process involves the creation of Tokens, which actually inject liquidity into the cryptocurrency market. In theory, it makes trading smoother and allows traders to protect against volatility. The addition of USDT can enhance liquidity, potential price stability, and narrow margins during periods of high trading volume.
With Bitcoin trading above $99,000 and experiencing high volatility, increased USDT liquidity could, depending on implementation, stabilize the market or exacerbate price volatility.
However, the huge scale of recent issuances, totaling 19 billion in just over a month, has fueled speculation. While Tether’s ability to meet liquidity demands quickly demonstrates its utility, it also raises questions about the potential for oversupply if not managed effectively.
Transparency Concerns and Backing Controversy
The cryptocurrency community has expressed concerns about whether Tether’s issuance will be coupled with sufficient reserves. Critics say too much issuance without full transparency could undermine market confidence, especially if Tether cannot prove its reserves.
“Zero-trust systems thrive on transparency. Too many releases without clarity can cause doubts, like bad coffee,” said one user on X comment.
This is not the first time this topic has been raised. In the past, Tether CEO Paolo Ardoino has addressed these concerns, emphasizing the company’s focus on strong backing.
He asserted that stablecoins should maintain reserves primarily in high-security assets such as US Treasury bonds to mitigate risks from uninsured cash deposits. Ardoino also pointed to ongoing discussions with regulators to establish a regulatory framework that secures the operation of stablecoins.
“Stablecoins should be able to hold 100% of their reserves in Treasury bonds, rather than risking bank failures holding large reserves in uninsured deposits. In case of bank failure, the securities return to the rightful owners,” Ardoino write.
Still, recent issuances highlight Tether’s strategy to optimize liquidity. For example, a significant portion of USDT is transferred from less active blockchains to Ethereum, to meet the growing demand on this network.
These adjustments help maintain Tether’s role as a primary source of liquidity in both centralized and decentralized markets, where stablecoins account for approximately 85% of daily trading activity.
Despite these benefits, continuous issuance also changes liquidity dynamics. Smaller blockchains may face reduced activity as USDT supply concentrates elsewhere. Additionally, increased USDT supply on Ethereum could lead to increased network congestion, raising transaction costs during peak trading periods.
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