The CEO of Tether, Paolo Ardoino, has recently refuted rumors suggesting the development of an official blockchain known as “Tether chain” by the stablecoin issuer.
In response to these claims circulating on X (formerly Twitter), Ardoino clarified that the company is backing various Layer 2 solutions that allow the use of USDT for gas fee payments.
“I have heard renewed rumors about the existence of a Tether Chain. Tether currently has no plans to establish an official blockchain. Instead, various independent Layer 2 solutions are being developed to facilitate $USDt for gas fees.”
He emphasized the significance of the company’s neutrality to prevent excessive centralization.
“One primary reason why Tether is not considering launching a chain in the near future is the paramount importance of neutrality.”
It is important to note, however, that Ardoino did not entirely dismiss the possibility of introducing a chain at a later stage.
Expansion of Tether’s USDT Reach
Platforms like Polygon on Ethereum’s Layer 2 have already integrated USDT for gas fee transactions. Despite this, Tether’s influence has extended beyond just the Ethereum network.
Tether’s USDT has maintained its leading position in the stablecoin market for a considerable period. Recently, its market capitalization exceeded $120 billion, surpassing the previous high of $83 billion. The majority of trading pairs on centralized exchanges are paired with USDT, contributing significantly to Tether’s dominance in the field.
In addition to its role within cryptocurrency trading, the USD-pegged stablecoin has also become popular for cross-border payments, particularly in regions facing significant local fiat currency devaluation.
Tron [TRX] has emerged as a prominent platform for cost-effective USDT transactions, handling nearly $60 billion and surpassing Ethereum in this regard. Nevertheless, alternative chains offering low-cost USDT transfers are emerging, exemplified by the Telegram-related TON (The Open Network).
Given its current standing, Tether has become a subject of scrutiny from critics and regulators. Ardoino recently rebuffed another instance of FUD that alleged the company’s involvement in illicit activities.
Despite this, the dominance of USDT serves as a barometer for market health and sentiment. An increase in its market share indicates higher liquidity levels in the market, with the USDT dominance index (USDT.D) revealing whether investors are shifting towards stablecoins (risk-averse) or heavily accumulating (risk-tolerant).
As of the current moment, the USDT.D index appears to be following a prolonged downward trajectory, aligning with Bitcoin’s price surge. Conversely, an uptick in USDT dominance would suggest risk aversion and panic prevailing in the market.