Tether Minted $1B USDT For ‘Inventory Replenish’ Christmas Day

Tether Treasury minted another one billion “authorized but not issued” USDT on Christmas Day, triggering some skepticism from the community.

Tether, the operator of the world’s largest stablecoin, USDT, has minted another billion USDT, which is “authorized but not issued,” according to CEO Paolo Ardoino.

Blockchain tracking platform Whale Alert took to X (formerly Twitter) on Dec. 25 to alert users that Tether Treasury had minted one billion USDT ($1 billion).

💵 💵 💵 💵 💵 💵 💵 💵 💵 💵 1,000,000,000 #USDT (1,001,100,000 USD) minted at Tether Treasuryhttps://t.co/i3Dqn5tSA6

— Whale Alert (@whale_alert) December 25, 2023

Tether CEO Ardoino subsequently responded with a public service announcement in the Whale Alert’s X thread, stating that the transaction was an “inventory replenish” on the Ethereum blockchain.

“Note this is an authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps,” Ardoino stated.

In traditional finance, inventory replenishment is the process of ordering stock from suppliers in time to meet customer demand and avoid stock shortages without stockpiling surplus inventory. 

In Tether’s terms, inventory replenishment is the process of creating new USDT that are stored in Tether’s treasury inventory as “authorized but not issued” USDT.

“These tokens are not part of the total market capitalization of USDT, as they have not been issued or released into circulation yet,” Tether’s FAQ reads.

According to data from the Tether Transparency page, $925 million in USDT is “authorized but not issued” on Ethereum as of Dec. 26, 2023.

See Also: Bitcoin ETF Does Not Give Access to Actual Bitcoin – Keiser

Ardoino’s latest PSA echoes the language of a previous one billion USDT mint in September 2023, when Whale Alert flagged a similar transaction. 

On that occasion, Ardoino also said that the USDT transaction was an authorization and not an actual issuance, with the allocated amount set to serve as inventory for upcoming issuance requests and chain swaps on the Tron network.

Some online industry watchers have expressed skepticism about Ardoino’s latest PSA and lack of transparency associated with Tether’s authorized but not issued transactions.

“It would be interesting to examine the document or agreement and learn more about the individuals responsible for this Christmas miracle of creating 1 billion USDTs of thin air,” one commenter wrote, asking whether Ardoino is one of the individuals responsible for such decisions.

Some skeptics also argued that the latest USDT mint will likely be used to increase the price of Bitcoin, as some industry observers have linked Tether’s USDT minting to BTC price pumping.

“Say it directly you minted it to pump BTC,” one commenter responded in the thread.

Tether has posted significant growth over the past year, with its market capitalization hitting new all-time highs through 2023. 

Since January, Tether’s market value has increased nearly 38%, surging from $66 billion to $91 billion, according to data from Coinstats. At the time of writing, Bitcoin is trading at $42,760, down about 2% over the past 24 hours.

In November 2023, Tether attributed USDT’s growth to two main reasons, with one being the continued market excitement around the possible approval of a spot Bitcoin exchange-traded fund. 

The firm has been actively moving into Bitcoin-related activity this year, disclosing plans to start buying Bitcoin to manage its reserves and launching multiple BTC mining operations.

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