Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
Tether has just announced the launch of its USDT on the Algorand blockchain. This addition makes it the fifth blockchain to support the stablecoin after Omni, Ethereum, Tron and EOS.
Tether’s USDT, largely regarded as the “king of stablecoins”, has now launched on another blockchain. This makes it the fifth blockchain that will be hosting the controversial USDT.
According to the announcement on the official Tether website, the Algorand blockchain will now join the list of USDT-supported networks which already includes Omni, Ethereum, Tron and EOS. This, Tether claims, was done to improve on “collaboration and interoperability within the growing digital asset space.”
The decision to extend USDT is also to improve security, efficiency and to also attract a lot more input from the cryptocurrency community with Algorand’s public, permissionless proof-of-stake and open-source blockchain. According to Paolo Ardoino, Tether’s Chief Technology Officer (CTO):
“Extending Tether into the Algorand ecosystem is a fantastic opportunity for us to further contribute to blockchain interoperability and collaboration. Algorand is an excellent team very much aligned with ours; we are proud to take this next step with them. We are very excited about the potential this enables for other projects in the decentralised ecosystem and we eagerly await working closely with many of them in the future.”
Since Tether’s USDT is a stablecoin backed by the US Dollar, it is mostly used by many traders who want to move funds around through other digital assets because it saves them the hassle of having to convert back to fiat every time. It sometimes is also the go-to coin for crypto exchanges especially when funds need to be moved among them. This also helps them circumvent the banks and other financial institutions that have regulations which might impede this process or might not be very willing to move large sums of money at all.
The USDT is used a lot more than other stablecoins but has not been without its own issues. Back in April, the office of the New York Attorney General (NYAG) alleged that Bitfinex used funds from Tether to cover up an $850 million loss. Bitfinex then released a statement shortly after, explaining that the NYAG’s court filings were “written in bad faith and are riddled with false assertions” because the funds in question were “not lost but have been, in fact, seized and safeguarded.”
Also, a lot of people in the crypto community have been apprehensive about the fact that Tether has never really supported its claim of being backed by the USD with a full accounting audit.
More recently, it was revealed that Tether unintentionally mined USDT worth about $5 billion and eventually destroyed them. According to reports, the mistake happened as Tether conducted a chain swap for Poloniex crypto exchange, as it moved funds from the Omni blockchain to Tron. This was also confirmed by Ardoino who eventually posted evidence of burn transactions.