The U.S. Dollar-backed stablecoin Tether(USDT), just hit and surpassed the $15 billion in total market capitalization, according to a twitter post. Driven by the booming decentralized finance, it was able to hit the milestone on September 17.
Tether’s market cap increased by $3 billion in just over a month after having hit the $12 billion milestones on August 14. At the beginning of this year, its market cap was at $4 billion, showing it has increased fourfold up to now.
What Caused USDT to Soar High
Upon the onset of the pandemic, the global economy was at a significant loss, but for the crypto space, immense growth, experienced. For the past two years, cryptocurrency was always at its lowest, but for this year, Bitcoin and Ethereum value have risen steadily.
According to data received from Coinmetrics, the use of Tether has boomed alongside the DeFi sector. The stablecoin has exceeded even the daily transfer values of Bitcoin and even Paypal, which is a mainstream payment service.
Tether growth can get attributed to the success of the DeFi industry. About two-thirds of the active USDT supply is on ERC20-minted Tether tokens which are handled by the Ethereum blockchain. Over $10 billion worth of USDT is in circulation on the Ethereum blockchain according to Tether website’s transparency page.
Tether conducted a billion Dollar token swap from Bitfinex to Binance late last month. Binance had a surplus of $1 billion USDT based on Tron blockchain and wanted to trade it for USDT. On September 15, another swap took place initiated by Tether as demand for the ERC-20 version of the stablecoin exceeded that of any other network.
However, there are ongoing debates to shift Tether transfers to other networks from Ethereum, as a gas fee. Over the past month, USDT has been made available on the Layer 2 OMG Network and launched on the Solana blockchain.
Tether in a New York Lawsuit
Meanwhile, some members of the crypto space are still calling for a full audit that will determine whether there are $15 billion real dollars and assets backing up the stablecoin or its just a sham. The company is currently undergoing a lawsuit in New York. In a letter filed on September 8, Tether was asked for disclosure of their financial documents.
The case looks into allegations that Bitfinex lost around customer funds worth $1 billion and used Tether reserves to cover up the imbalance. Both Tether and Bitfinex have dismissed the case as baseless.