Binance has initiated a swap of $3 billion worth of Tether (USDT) from its Tron wallet to Tether’s treasury address on the Tron blockchain, according to Tether CTO Paolo Ardoino. The move is part of Binance’s efforts to rebalance its USDT reserves from its cold wallets on Tron to Ethereum. After the swap, Tether will return the same amount of USDT to Binance’s ERC20 cold wallets on Ethereum.
“Likely, Binance has mostly USDT-on-Tron in its cold wallet and might want to rebalance its cold wallet, moving part of its Tether reserves to USDT-on-Ethereum,” Ardoino said.
The swap comes at a time when Binance has seen large amounts of assets being withdrawn from the platform. Since yesterday, the exchange has experienced a net outflow of over $2 billion in various crypto assets, according to estimates from Simon Cousaert, director of data at The Block.
Earlier today, Binance temporarily halted withdrawals of the stablecoin USDC due to inadequate reserves on the platform, according to Binance CEO Changpeng Zhao.
The Tether and Binance Chain Swap
Tether has announced that it will be conducting a “chain swap” with Binance, converting $3 billion worth of USDT from the Tron network to the Ethereum network. The move is part of Tether’s ongoing efforts to increase the flexibility and liquidity of its stablecoin, which is used by many cryptocurrency exchanges as a means of facilitating trading operations.
In a statement, Tether said that the total supply of USDT will not be affected by the chain swap, which is expected to take place within the next few minutes. “The tether total supply will not change during this process,” the company said.
Tether is a digital token issued by Tether Limited on various blockchain networks, including Ethereum and Tron. The token is designed to provide a stable, secure and transparent means of facilitating transactions on cryptocurrency exchanges, and is used by many exchanges as a way of reducing volatility and improving liquidity.
The chain swap between Binance and Tether is just the latest in a series of moves aimed at increasing the flexibility and utility of the USDT stablecoin. Earlier this year, Tether announced plans to launch a new version of its token on the Algorand blockchain, which is designed to provide faster transaction times and lower fees than other blockchain networks.
Tether’s decision to conduct a chain swap with Binance comes at a time when the cryptocurrency market is experiencing increased volatility and uncertainty. Many experts believe that the adoption of stablecoins like USDT could help to reduce volatility and improve liquidity in the market, making it more attractive to investors and traders.
Final Thoughts
Overall, the chain swap between Binance and Tether is a significant development for the cryptocurrency market, and is likely to be seen as a positive step towards increasing the utility and flexibility of stablecoins like USDT.
