Tether Holdings, as the issuer of the world’s largest stablecoin USDT, has decided to cancel plans to launch its own blockchain.
Paolo Ardoino, CEO of Tether, explained in an interview with Bloomberg News that they made this decision due to a saturated market and supply-demand principles.
Ardoino stated that a large number of blockchains fill the market despite Tether’s strong technological capabilities.
Already Established Blockchains Available
Paolo Ardoino stated that Tether’s decision to cancel plans to launch a blockchain could be the right move given the many established and effective blockchains in the current market.
While Tether plays an important role in global crypto trading and money transfers with a market capitalisation of $117 billion. There were strong arguments that launching its own blockchain could be a viable endeavour.
However, the dominance of several large blockchains in the industry calls into question the necessity of such an endeavour.
According to DefiLlama’s data, of the 306 existing chains, the top five control about 86 per cent of the total value of locked assets. This shows how consolidated the market is.
Ethereum manages $87.7 billion of the $133.2 billion total value locked (TVL) across all chains. TRON is a major player, supporting 49% of the USDT supply with a TVL of $8.1 billion.
The success of a blockchain depends on factors such as speed, low transaction fees, diverse use cases, and strong security. Ethereum’s dominance is maintained despite the platform’s pioneering advantage, flexibility for developers to create smart contracts, and relatively high transaction fees. The blockchain ecosystem has evolved into a multi-chain environment where developers and issuers spread their activities across various platforms.
Concerns Around Tether Reserves
Although Tether (USDT) has been a huge success in the crypto space, concerns remain about the quality of the assets backing the stablecoin.
A recent report by the United Nations states that Tron is popular in cyber fraud and money laundering activities in Southeast Asia. Such reports are among the factors that can damage the reputation of major cryptocurrencies such as Tether.
However, Tether denies such allegations, emphasising that it cooperates with law enforcement agencies and that its token is highly traceable. This defence shows that Tether is serious about transparency and regulatory compliance.