Tether has announced that $1 billion will be transferred to Ethereum and another $20 million will go to Avalanche. The company also noted that this is “business as usual” amid the current panic in the market.
Following recent developments in the stablecoin space, Tether (USDT) has announced that it is coordinating a USDT asset swap from TRC-20 Tron to the Ethereum and Avalanche blockchain.
In a tweet, Tether announced that $1 billion will be moved from the Tron blockchain to Ethereum. On the other hand, another US$20 million will be converted into Avalanche. According to Tether, this does not change anything in the overall range of stablecoins.
The announcement comes amid fears of a collapse in stablecoins following the recent fiasco of TerraUSD (UST) and Terra (LUNA). In addition, USDT also showed price volatility, falling below $0.99 on many exchanges on Thursday. As a result, many have expressed concern that the top-selling stablecoin is showing signs of struggle.
However, in an interview with Cointelegraph, Tether CTO Paolo Ardoino reassured traders that USDT is not like algorithmic stablecoins like UST. Ardoino said that Tether “has a strong, conservative and liquid portfolio of cash and cash equivalents.” These include Treasury bills, money market funds, and securities.
Ardoino also noted that the ongoing fear, uncertainty or doubt or FUD surrounding stablecoins is becoming a profitable business for some traders. He explained that some firms buy USDT for less than $1 on some exchanges and exchange it for more than $1 on Bitfinex and on the Tether website.
In another statement released by Tether, the company emphasized that verified clients can still use USDT on their website. The stablecoin issuer reported that even after redeeming $300 million in the last 24 hours, it had no issues.
Ardoino said the stablecoin has never missed a redemption despite numerous black swan events. He explained that:
“Tether is pleased that the market continues to show confidence in Tether […] We are growing rapidly in the industry and as an industry. together we will learn from these events.”
Related: Terra ‘rescue plan’ still in place as LUNA drops below $5, Bitcoin surges to ‘$138K’ in UST
Meanwhile, Terra founder Do Kwon recently shared plans to restore the UST stablecoin peg. Kwon explained that the way forward would be to “absorb the stablecoin supply that wants to exit” before UST is repegged.
Because of this, Kwon advocated an increase in the underlying pool from 50 million to 100 million Special Drawing Rights. In addition, the founder of Terra said that they could reduce the PoolRecoveryBlock from 36 to 18. Kwon said that this allows the system to “gobble up UST faster.”