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Tether believes that the Merge is “one of the most significant moments in blockchain history”.
USDT stablecoin issuer Tether has announced that it is in support of the pending Ethereum Merge upgrade. The upgrade will change the blockchain’s consensus from Proof-of-Work (PoW) to a more energy-efficient and scalable Proof-of-Stake (PoS).
This comes after Circle Pay, the issuer of the USDC stablecoin, joined other firms in the industry by announcing that it would only support Ethereum’s PoS chain after the September 19 upgrade because “USDC as an Ethereum asset can only exist as a single valid ‘version‘”. Commenting on the much-anticipated milestone, Circle wrote:
“USDC has become a core building block for Ethereum DeFi innovation. It has facilitated the adoption of L2 solutions and helped broaden the set of use cases that today rely on Ethereum’s vast suite of capabilities. We understand the responsibility we have for the Ethereum ecosystem and businesses, developers and end users that depend on USDC, and we intend to do the right thing.”
Tether agrees, touting the Merge as “one of the most significant moments in blockchain history” in a Tuesday blog post. Tether also acknowledged that as the issuer of the top stablecoin on the Ethereum blockchain, it was their responsibility to reassure the community of the support of the Merge.
“Tether believes that in order to avoid any disruption to the community, especially when using our tokens in DeFi projects and platforms, it’s important that the transition to POS is not weaponized to cause confusion and harm within the ecosystem […] Tether will closely follow the progress and preparations for this event and will support POS Ethereum in line with the official schedule. We believe that a smooth transition is essential for the long-term health of the DeFi ecosystem and its platforms, including those using our tokens,” Tether wrote.
Currently, Tether USDT is the leading stablecoin in crypto, trading at 10 times the volume of its closest competitor USDC. According to data from CoinMarketCap, USDT has a market cap of $66.53 billion with USDC trailing at $54.02 billion of the $153 billion stablecoin market cap. In terms of circulating supply on the Ethereum blockchain, USDT is at $32.3 billion with USDC at $45.1 billion according to Etherscan. With the assured support of the top two stablecoins, the Merge is expected to go on smoothly. A final Goerli testnet trial set for this week will determine if the upgrade happens according to schedule.
Ethereum co-founder Vitalik Buterin has, however, warned that the power that these stablecoins wield could become a problem in future hard forks. He advocated for the adoption of different kinds of stablecoins to prevent future contention.