Stablecoin issuer Tether announced it was conducting a large cross-chain swap of more than 2 billion Tether-USD (USDT) from various blockchain networks to the Ethereum network on November 6, 2024.
According to Tether, 1 billion USDT will be swapped from the Tron network, 600 million USDT will be transferred from the Avalanche C-Chain, an additional 300 million USDT from the NEAR protocol will also make its way to the Ethereum network, and, finally, 60 million USDT from the EOS network will also be swapped to Ethereum.
The stablecoin firm explained that the cross-chain swap was performed on behalf of a large, unnamed exchange wishing to transfer their USDT holdings from various cold wallets to the Ethereum blockchain.
Tether also assured investors that the large cross-chain transfer would not affect the total supply of USDT.
Tether tokens in circulation. Source: Tether
Tether CEO clarifies reserves backing USDT
The large cross-chain transfer of USDT comes amid an unsubstantiated report from the Wall Street Journal that the United States government is investigating the stablecoin firm over alleged money laundering and sanctions violations.
In response to the news, crypto markets briefly tumbled as fear, uncertainty, and doubt gripped investors. The market uncertainty surrounding the digital asset market's largest fiat off-ramp prompted Tether CEO Paolo Ardoino to issue a breakdown of the company's reserve assets backing its dollar-pegged stablecoin at Lugano's PlanB event in Switzerland.
Breakdown of Tether’s reserves. Source: Tether
These reserve assets included approximately $100 billion in US Treasury bills, 82,000 Bitcoin (BTC), valued at roughly $6.2 billion using current market prices, and 48 tons of gold — which recently hit an all-time high of $2,790 per ounce against the US dollar.
In October 2024, Tethers USDT also hit a market capitalization of $120 billion. This high market capitalization, which is seen by many traders as a proxy for increased trading activity in the digital asset markets, is often seen as a bullish sign for asset prices.
However, data from Chainalysis revealed that stablecoins are increasingly used as a store of value in economies where the local currency is rapidly depreciating and not for market speculation.
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