- This is to rebalance liquidity
- The lion’s share of stabelcoin is destined for Binance
- The exchange has transferred 750 million USDT to another network
Tether has authorized 1 billion USDT ERC-20 on the Ethereum blockchain. The purpose of the transaction is to replenish reserves and support swaps in various networks.
This is the second such transaction of a large amount. Tether previously made a similar transfer in April. The company’s CTO Paolo Ardoino explained:
“Tether periodically works with various third parties (exchanges, hedge funds, etc.. e) to help them rebalance USDT liquidity in the networks. Platforms may face a situation where most of the USDT goes into one blockchain, but payouts must be processed in another. In such cases, crosschain swaps may be required.”
The released stabelcoins remain in the Tether vault as “authorized but not released.”. They are not included in the capitalization calculation.
The Binance exchange later announced that it would use the Tether team to transfer 750 million USDT TRC-20 to the USDT ERC-20 network. They warned users in advance not to panic about large transactions from the exchange’s hot wallets. User funds remain safe.
In the meantime, customers have other reasons to panic. Binance.US said that freezing assets threatens the exchange with liquidation. They urged the court not to take such a step.