Paolo Ardoino, CEO of Tether, recently squashed rumors of a potential Tether blockchain. He clarified that the company has no plans to develop an official blockchain, instead preferring to support the integration of its stablecoin, USDT, on various networks for decentralized use cases. This includes gas fees on independent Layer 2 (L2) solutions. This approach aligns with Tether’s principle of neutrality, encapsulated in its motto, “Unstoppable TogETHER,” which signifies a preference for collaboration over consolidation.
The speculation surrounding a Tether blockchain has been fueled by the company’s market dominance and the ongoing attention it receives from regulators. Nevertheless, as Ardoino pointed out, any product or announcement made in the near future would likely be overshadowed by the upcoming election, prompting a postponement of new product releases.
As the largest stablecoin by market cap, valued at over $118 billion and controlling approximately 75% of the stablecoin market, Tether has firmly established itself as the primary fiat gateway in the crypto ecosystem. Its recent extension onto different networks, including The Open Network (TON), where its supply swiftly exceeded $1 billion, has further stoked rumors of a Tether blockchain.
However, Tether’s expansion has not been without controversy. Regulatory scrutiny continues to shine a spotlight on the company, with investigations into potential involvement in money laundering and sanctions violations. These investigations have caused ripples in the market, and concerns about Tether’s reserve backing and transparency have been raised.
Despite the growing calls for a more transparent structure, Tether remains adamant in its stance against developing its own blockchain. Even as Ripple’s CEO hints at a potential “Black Swan event” linked to Tether’s regulatory issues, Tether continues to rebuff the idea of a blockchain solution.
The company has also been accused of using USDT to manipulate crypto prices, particularly Bitcoin, allegations that it has staunchly denied. Tether asserts that such claims demonstrate a lack of understanding about the role of the stablecoin in the market. In response to an academic study suggesting that Tether’s issuances drive Bitcoin prices, the company argued that the study was fundamentally flawed and based on limited, cherry-picked data.
Tether insists that every USDT token is fully backed by reserves and is issued according to market demand, not for price manipulation. The company emphasizes that the issuance of USDT reflects its utility and acceptance across exchanges, rather than attempts to influence prices.
In ongoing legal battles, Tether and its affiliated exchange, Bitfinex, argue that the accusations against them are unsupported by evidence. They maintain that the growth and issuance levels of USDT reflect its utility and market demand, rather than any clandestine manipulation.
