In a recent announcement, it has been revealed that Tether is moving two billion USDT around the blockchain. Thus, the coins from the Tron blockchain will be shifted to the Ethereum blockchain. It has reportedly warned the users regarding the total supply not changing while the process takes place and the company will be collaborating with a third party in order to proceed with the swap of two billion USDT.
The process of shifting cryptocurrencies from one blockchain to another is called a chain swap, and it allows users to use several blockchains while holding interchangeable coins.
USDT users must swap the current network in which they are operating in order to use multiple blockchains while holding USDT.
In addition to this, it should be noted that to ensure that the circulating supply is balanced, Tether occasionally burns USDT after minting new ones on the requested blockchain.
This can be understood with an example; if a user request 1000 USDT to be swapped from Ethereum to Omni blockchain, Tether mints 1000 new coins on Omni blockchain and issues those coin to a user.
Tether shared a blog post after mentioning that the company touted seven years of stability and its position as a leader of the market, that read:
“Seven years later, USDT remains the market leader and dominant stablecoin in an industry that has grown to exceed $100 billion in the total supply of stablecoins.”
As for how stable coins maintain their pegs, the blog post mentioned:
“All issued USDT are always 100% backed by Tether reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties.”
In response to this, one of the commentators released a statement that said:
“If you’re printing “dollars” that aren’t actually 1:1 backed by “dollars”, what you’re doing is digital counterfeit at an enormous scale.”