What is the news about Tether (USDT), and how is the company developing?
The Tether token (USDT) issued by Tether has been and remains the leading stablecoin in the cryptocurrency market regarding capitalization, which already exceeds $117 billion.
Moreover, VanEck analysts expect that the total capitalization of the stablecoin market may exceed $200 million by 2024; as of August, this figure is already approaching $170 billion. At the same time, USDT's share of its segment continues to grow.
More USDT
Tether constantly issues new USDT tokens: last year alone, the capitalization of the stablecoin grew by more than 40% from $83 billion to $117 billion. At the same time, the issuer often issued $1 billion at a time — for example, this is what happened in the Ethereum network in February 2024.
In addition, Tether covers more ecosystems: according to CoinMarketCap, the USDT stablecoin is supported in more than 60 blockchain networks. In the spring of 2024, Tether launched USDT on the Celo blockchain. In the same period, the company partnered with the TON Foundation and launched the USDT stablecoin on the TON blockchain. As a result, as of August 2024, the TON ecosystem raised over USDT 700 million in just one quarter.
One of the main reasons for launching USDT on TON, in addition to the growing popularity of the ecosystem, was very cheap transfers. USDT support will also help attract some of Telegram's users, whose number is already close to 1 billion, as Tether is the only stablecoin that supports the Wallet built into the messenger. Also in August, Tether added support for the Aptos blockchain, which now uses USDT tokens.
Tether expansion
In November 2023, the company announced plans to invest $500 million in its mining farm and become the most significant player in this market. According to the company, these funds will be used to build its own infrastructure and acquire stakes in existing mining companies.
In the same month, Tether partnered with German mining company Nothern Data AG and provided it with a credit line for more than $600 million. Moreover, in September 2023, Tether purchased $420 million worth of Nvidia GPUs to exchange them for a 20% stake in Nothern Data AG.
Apart from mining, Tether has also targeted the AI sector and plans to invest in it. One of the issuer's main goals is to explore applying decentralized technology to artificial intelligence. Details are still scarce, but according to Tether CEO Paolo Ardoino, the company plans to invest more than 90% of its profits in areas "important to the community."
Legal proceedings with Tether
Since its founding, the company has often been featured in cases involving financial irregularities and even fraud. For example, in its report on drugs and crime, the United Nations Office sent claims against Tether because its USDT stablecoin is often used in criminal schemes related to fraud and money laundering, especially in the Tron blockchain. Because of this, as of August 2024, Tether has already blocked over 1.2 billion USDT on more than 1,755 addresses.
The problem has probably become so acute because most USDT is concentrated in the Tron ecosystem, which accounts for about half of all criminal crypto transactions. The issuer has not yet made any statements regarding terminating USDT support on the Tron blockchain. It notes that the company retains the right to block the stablecoin on any wallets in all networks where the token it issues is supported.
JPMorgan noted that regulators will increase their scrutiny of Tether as new regulatory rules regarding transparency and KYC/AML compliance are under development. The company will need to follow them more closely, which could potentially affect Tether's investment appeal.
Although Tether itself is actively developing, and the capitalization of its stablecoin continues to increase, some factors restrain this growth in no small measure. This is due to the new Markets in Crypto-Assets (MiCA) bill, enacted on June 30, 2024, regulating the rules for providing financial services with stackablecoins within the European Union. Since Tether lacks the necessary licenses to offer such services as of August 2024, the company must remove all liquidity in USDT tokens from the EU market.
After the MiCA was passed, many major crypto exchanges restricted EU customers from accessing USDT stablecoin-related services such as trading and staking. However, some exchanges did this even before the bill came into force: for example, OKX stopped trading USDT stablecoin in the Eurozone back in March 2024. The founder of Tether himself believes that the MiCA bill poses a threat to the entire stablecoin market and the entire banking system.