Tether Floats New Stablecoin USDT0 on Kraken’s Ink Protocol

Financial technology and payments giant Tether has tapped Kraken to launch a new stablecoin dubbed USDT0.

Precisely, the stablecoin issuer initially leveraged the crypto exchange’s Ink Protocol to deploy USDT0. Ink is Kraken’s flagship Ethereum Layer-2 solution.

USDT0 Product, Here’s Key Details to Note

In its January 16 announcement, Tether said USDT0 aims to develop into a cross-chain “unified liquidity layer.”

This will make the transfer of USDT across several blockchain infrastructures easier.

The stablecoin utilizes LayerZero’s Omnichain Fungible Token (OFT) standard. As Tether noted, this relayer is designed to mint and burn tokens on different blockchains.

For context, the major function of the OFT framework is ensuring that there is a locked USDT on Ethereum backing each USDT0 token minted on a destination blockchain.

This will help to maintain the token’s stability and reliability. The new token could also be instrumental in spreading Tether’s liquidity and useability.

Moreover, USDTO0 marks a crucial step towards facilitating smoother cross-chain transactions for Tether users.

Tether is the world’s largest stablecoin issuer, judging by its market capitalization.

USDT prides itself on being the most liquid and most used stablecoin. It is worth noting that Paolo Ardoino’s takeover as CEO in late 2023 is crucial to the company’s progress so far.

During this time, some of its key achievements include launching Bitcoin mining operations in El Salvador. In addition, Tether is also creating an internal AI research team.

Regarding the stablecoin, Ardoino said,

“USDT0 introduces a much-needed solution for seamless USDT movement across ecosystems. It’s exciting to see this innovation emerge and tackle real market demand.”

Why Kraken’s Ethereum Layer-2 Ink?

Kraken’s Ink is designed for institutional liquidity and optimized transaction speeds. It allows users to deposit and withdraw USDT0 with ease.

It was launched in December, months ahead of schedule, and in less than one month, it has recorded huge strides.

There have been quite some advancements on the network. This includes being accepted to the Optimism Security Council, launching a version of the Velodrome decentralized exchange, and being a test case for Tether’s latest token.

This platform guarantees Tether’s institutional investors a reliable and secure environment for managing their USDT0 transactions.

Speaking about the development of Ink, six-year Kraken veteran Andrew Koller said,

“We’re launching things very rapidly. We’re engaging in a lot of experimentation.” Noteworthy, Kraken is aware of Tether’s security mindedness and cuted that it typically waits several months to see if a chain has attained stability and meets its criteria to launch.

Tether decided to utilize Ink after considering Kraken’s brand reputation and the OP Stack’s “tried and true” tech.

Tether Diversifying Product Offerings

This latest development comes after Tether allegedly made plans to move to El Salvador.

The stablecoin issuer obtained the region’s Digital Asset Service Provider (DASP) license. This license allowed it to function in a jurisdiction where Bitcoin is legal tender.

El Salvador has a supportive regulatory framework that encourages crypto businesses.

Beyond stablecoins, Tether wants to do business in the commodity market. It intends to take on the role of a lender in the sector.

The stablecoin issuer plans to focus on smaller commodity traders who face challenges securing credit. This underscores Tether’s interest in diversifying its portfolio as it has also explored oil financing lately.