In light of recent developments in the stablecoin space, Tether (USDT) announced that it’s coordinating a chain swap to move 1B USDT assets from Tron’s TRC-20 to Ethereum and Avalanche blockchain.
Tether shared a tweet mentioning that 1 billion USDT will be transferred from Tron’s blockchain to Ethereum. Whereas, an additional 20 million USDT will be converted to Avalanche. Tether claims that this will have no effect on the stablecoin’s total supply.
The announcement came just after Terra crashed over 90% due to FUD spread about UST de-pegging. One of the reasons behind the de-pegging issue generated in UST was a larger number of withdrawals from DeFi protocols such as Anchor Protocol, Curve, and others.
Apart from this, USDT also suffered price fluctuations, slipping below $0.99 on many exchange platforms on Thursday. Consequently, many raised concerns over the most-traded stablecoin showing signs of disturbance.
Tether’s chief technology officer Paolo Ardoino assured traders that USDT is not like algorithmic stablecoins such as UST. Ardoino emphasized that Tether has a strong, conservation, and liquid portfolio that consists of cash and cash equivalent. This includes money market funds, treasury bills, and commercial paper holdings.
Ardoino further mentioned that certain traders are profiting from the persistent fear, uncertainty, or doubt (FUD) surrounding stablecoins. He also stated that some firms are buying USDT below $1 on some exchanges and are redeeming it for above $1 on the Tether website and Bitfinex.
Do Kwon Terra founder intends to restore the UST stablecoin peg. He said that before re-pegging UST, the exchange plans to absorb the stablecoin supply that wants to exit.