Tether (USDT) supply surpassed the $100 billion mark for the first time

The capitalization of the largest stablecoin in the crypto industry, Tether (USDT), has reached 100 billion USD for the first time thanks to surging investment demand from the market.

On the morning of March 5, in the context of Bitcoin surpassing the threshold of 68,600 USD and approaching its ATH peak at 69,000 USD, another pillar of the cryptocurrency industry, stablecoin Tether (USDT), also marked the first time in its 10-year history. operations have a capitalization of more than 100 billion USD.

The supply of USDT in the last 7 days has increased by 2 billion USD, thereby officially reaching 100.2 billion USD this morning, with the latest issuance transaction on the TRON network.

Thus, from October 2023, when the crypto market began to recover, Tether's capitalization has expanded by up to 17 billion USD.

According to the latest data updated on the Tether website, more than half of the USDT supply is concentrated on TRON with 53 billion USDT, followed by Ethereum with 46 billion USD, and the remaining blockchains with much lower amounts. .

Currently, Tether is accounting for more than 69% of the entire stablecoin market share, far ahead of USDC (20.5%), DAI (3.4%) and FDUSD (2.2%).

During the previous market cycle, Tether capitalization peaked at $83 billion in April 2022, right before the LUNA-UST collapse. By 2023, this stablecoin attracted a large market share when its two main competitors, USDC and BUSD, encountered depeg incidents and legal bans, respectively.

Tether also has an extremely successful year in 2023 thanks to its strategy of investing a large amount of USDT-backed assets in US Treasury bonds, earning profits of up to 6.2 billion USD. The company then uses the profits to create surplus funds for USDT, as well as invest in Bitcoin, gold, and other initiatives.

All of Tether's US Treasury bonds are kept at Cantor Fitzgerald, an asset management company headquartered in New York (USA). Responding to the press in January 2024, Cantor Fitzgerald CEO Howard Lutnick stated that Tether has enough assets to guarantee the value of USDT, as well as expressed confidence in the operating model of this stablecoin company.

However, According to JPMorgan analysts, US authorities can intervene in the use of Tether abroad through OFAC.

"Hostile" views of JPMorgan experts

Even though Tether is not a US entity, the country's authorities can still track the issuer of the stablecoin, through the US Treasury Department's Office of Foreign Assets Control (OFAC), a number of experts. JPMorgan experts commented.

In a recent report by JPMorgan experts led by Nikolaos Panigirtzoglou, they said US regulators have the power to control the use of USDT abroad through OFAC. Tether's association with coin-mixing platform Tornado Cash is an example.

In the past, OFAC punished Tornado Cash in 2022, accusing it of being a money laundering tool for malicious actors. At that time, Tether continued to support wallet addresses blocked by the US, because the company had not yet received an official request from the government. However, in December 2023, Tether ordered the freezing of stablecoins in wallets sanctioned by OFAC as a proactive compliance measure.

In response, Tether CEO Paolo Ardoino said that JPMorgan seems to be jealous of Tether's dominant position in the cryptocurrency market.

Earlier this month, Ardoino also labeled JPMorgan "hypocritical", when the bank predicted that Tether's market share expansion would increase risks for the crypto industry. The Tether CEO emphasized that Tether's dominance may be negative for its competitors, including banking giants looking to achieve similar success, but this is not harmful to the markets. really need USDT.

Paolo also affirmed that his organization is willing to cooperate with regulators globally, to help them understand stablecoin technology and guide how to approach them.

However, stablecoins are still in the sights of world authorities, especially the US and Europe. The clearest evidence is that two legal frameworks are waiting for "customs clearance", the Clarity for Payment Stablecoin bill (transparency in stablecoin payments) is about to be voted on by the US House of Representatives and the Digital Asset Market Act (MiCA) will have Effective from June 2024 in Europe.

According to JPMorgan, the above regulations will put pressure on Tether, as its appeal will decline compared to stablecoins with better transparency and KYC/AML compliance.

Analysts are also dissatisfied with Tether's current disclosures. They say Tether's attestation reports still do not fully reflect its assets and independent auditors. This is a problem that the market's largest stablecoin issuer has regularly faced since its inception.

After paying a $41 million fine to the US Futures Trading Commission (CFTC) in October 2021 for hiding reserve assets, Tether is working to restore trust and become more transparent. However, it is still not highly rated compared to its direct counterpart, Circle, because it seems they comply with regulations better.

Based on the latest financial reports, Tether is one of the most profitable companies in the cryptocurrency industry in 2023, with annual profits of up to 6.2 billion USD.

Fed Governor's "open" perspective on stablecoins

In related developments, Christopher Waller, a Governor of the US Federal Reserve (Fed), expressed his support for stablecoins and the influence of the cryptocurrency industry on the US dollar. DeFi could leverage the global strength of the USD, he said, as long as the stablecoin is pegged to the US dollar, as 99% of stablecoins are today.

While critics often warn about the risks that digital currencies can harm the USD, Christopher Waller's latest statement goes against the majority. He emphasized that stablecoin dependence on the USD could actually help strengthen the US fiat hedge.

However, the person who was trusted by former President Donald Trump in 2020 still admitted that if in the future people switch to preferring digital currencies over USD, this could be a threat to world monetary policy.

However, the world still seems unable to deny the power of the USD on the US economy and its foreign policy benefits.

​