Amid speculation that Tether, issuer of the largest stablecoin in the crypto market USDT, could launch its blockchain, the company’s CEO, Paolo Ardoino, has addressed the rumors with key details.
Tether Abandons Plans To Launch Own Blockchain
In an interview with Bloomberg News, Ardoino acknowledged Tether’s technological capabilities but noted that blockchains are rapidly becoming a “commodity” in the market. Ardoino said
We are very good in technology, but I think blockchains will become almost a commodity in the future. Launching a blockchain ourselves might be not the right move. There are very good blockchains.
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According to Bloomberg, the stablecoin giant’s decision not to build its blockchain network is notable, given Tether’s dominant position in the crypto market. With a market capitalization of $115 billion, USDT is the most widely used stablecoin and is a key on-ramp and off-ramp for crypto trading.
However, Ardoino’s comments suggest that Tether prioritizes the security and sustainability of its stablecoin over the potential benefits of having a proprietary blockchain. “For us, blockchains are just transport layers,” he said.
The Dominance of The Big 5 Blockchains
The report further notes that the blockchain ecosystem is becoming increasingly diverse and competitive, with data from DeFiLlama showing that the top five blockchain networks control approximately 86% of the total value locked (TVL) across 306 chains.
These are the BNB Smart Chain, Ethereum, Polygon, TRON and Avalanche, with a significant amount of decentralized applications (Dapps) developed and contracts issued on the chains, according to DappRadarr data.
Nevertheless, Ethereum, the leading blockchain in terms of usage, accounts for $87.7 billion in total value locked out of $133.2 billion across all networks. Other blockchains, such as TRON, which handles 49% of the USDT supply, have also established themselves as viable alternatives for Tether’s stablecoin.
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According to Angela Ang, senior policy adviser at blockchain intelligence firm TRM Labs, the business viability of these blockchains ultimately depends on their ability to offer unique utilities, such as speed, security, cost, or interoperability, that are not already present in the ecosystem.
Tether’s decision to remain “blockchain agnostic” suggests the company’s focus on ensuring the widespread adoption and usability of USDT rather than tying its stablecoin to a specific blockchain network.
This approach aligns with Ardoino’s view that blockchains are increasingly becoming commoditized and that Tether’s priority is providing a reliable and secure stablecoin that seamlessly integrates with various blockchain platforms.
At the time of writing, the total crypto market capitalization has jumped to $2.135 trillion from Friday’s opening value of $2.09 trillion in response to the recent speech by Federal Reserve Chairman Jerome Powell, who hinted at further interest rate cuts.
Featured image from DALL-E, chart from TradingView.com