Tether to launch USDT stablecoin on Polkadot and Kusama

Tether to launch USDT stablecoin on Polkadot and Kusama

Tether announced Tuesday that it would launch its USDT stablecoin on the Polkadot and Kusama networks.

The launch schedule isn’t determined yet as the formation of parachains is pending, said Tether.

Parachains are individual blockchains that run parallel within the Polkadot ecosystem (Polkadot and Kusama). They can interact with each other and also with external networks such as Ethereum using bridges. This flexibility helps address the problems of scalability, security, and interoperability of blockchains.

Tether will first launch on Kusama, Polkadot’s experimental cousin network. Kusama helps projects prepare for deployment on Polkadot. It is built using Substrate (a blockchain development kit) and has nearly the same codebase as Polkadot.

Tether CTO Paolo Ardoino told The Block that Tether will “most likely launch on the Statemint parachain soon after Statemint becomes available.”

Statemint was introduced last month by Polkadot developer Parity Technologies. It would provide functionality for deploying assets such as stablecoins in the Polkadot and Kusama networks and help end-users with lower fees.

“We are expecting the launch of Statemint in the next few months,” Ardoino told The Block. “But the roadmap is not yet finalized, and so this is all still in the planning stages.”

“We also continue to look at Kusama,” said Ardoino. “Kusama would theoretically allow us to start experimenting with supporting Tether on parachains even before Statemint is officially live.”

Tether’s planned USDT launch on Kusama and Polkadot would make the stablecoin available on a total of ten networks. USDT is currently live on Ethereum, Solana, Algorand, EOS, Liquid Network, Omni, Tron, and Bitcoin Cash’s Standard Ledger Protocol.

Ethereum remains the popular network for USDT — the world’s largest stablecoin with a market capitalization of over $43 billion — according to data compiled by The Block.

Nearly $23 billion worth of USDT has been issued on Ethereum, followed by Tron, worth almost $20 billion. USDT hasn’t gotten much traction on the other networks yet.

Tether said it aims to have USDT as the first-ever stablecoin on Polkadot. “Polkadot, with its parachain structure, has the ability to grow significantly in the coming years. This growth will be driven by its high level of scalability,” said Ardoino.

EQUOS Launches Tether to Expand Stablecoin Offering

EQUOS, Diginex’s institutional-grade cryptocurrency exchange, has expanded its stablecoin offering by listing Tether (USDT), providing an onramp into the EQUOS ecosystem for traders who use USDT as a base currency.

Tether is well-established as the largest and most widely used stablecoin, and is currently ranked fourth-largest cryptocurrency, by market capitalisation. However, it has also been subject to negative media coverage and concerns from critics.

In considering USDT, the EQUOS listing committee undertook a thorough process, which it applies to all potential listings, including analysis on utility, degree of decentralisation, current usage, and transaction flow, ongoing development effort, innovation over other blockchains, and long-term prospects.

The EQUOS listing committee was formed in order to differentiate the platform’s listing process from other exchanges, using clear independent criteria that is not swayed by offers of sponsorship by projects, as is seen on some other exchanges. In the specific case of Tether, concerns were significantly reduced following the settlement reached by the New York Attorney General in February, regarding its recent inquiry into Tether’s financial transparency.

EQUOS’ parent Diginex is listed on Nasdaq, and as one of the few exchanges that does not make markets on its own exchange, sees itself as a regulator of its own marketplace, aiming to protect its customers from bad actors that have been prevalent in the cryptocurrency space in the past.

Kelvin Ting, Head of Blockchain Strategy at Diginex commented: “Tether was always going to be an interesting debate at listing committee. Due to Tether’s position as the first stablecoin in the market, it is traded by both retail and institutional clients as a base currency and allows us to expand our client base to these traders. We decided to proceed on the balance of all considerations including the recent progress it has made towards financial transparency.”

This announcement comes just days after Tether released a report, in which independent auditor Moore Cayman attested that the stablecoin is fully backed by US dollar reserves, a move that is likely to reinforce its popularity. It had previously been reported by several publications that Tether was only partially backed by US dollar holdings.

EQUOS offers a stablecoin pair crossing USDT and USD Coin (USDC), improving capital efficiency on the exchange. This allows holders of Tether to take advantage of the many benefits that USDC fungibility on EQUOS offers. Currently, EQUOS uses USDC as its base currency for trading with other cryptocurrencies, such as Bitcoin and Ethereum. In addition, EQUOS also offers the ability for customers to deposit fiat USD, and then swap into USDC on a one-to-one basis, without any exchange rate fees or risk.

Fungibility is central to minimising extra costs for investors trading through EQUOS, as it empowers traders to efficiently allocate into their chosen assets while incurring the least amount of fees associated with bridging through a stablecoin base currency. By offering USD — USDC fungibility, clients can use both currencies interchangeably at no additional cost. To this end, the listing of USDT on the exchange acts as an onramp mechanism for traders who have historically traded in USDT to EQUOS’ fungible ecosystem.

Richard Byworth, CEO of Diginex, said: “Our strategy is to provide our clients with greater choice and increased capital efficiency. The addition of Tether to the suite of dollar products was a logical progression in that goal. A lot of the criticism of Tether was poorly researched and designed to bring a negative slur to the industry. We are proud to support Tether, an early innovator in the development of the cryptocurrency industry.”

Tether’s stablecoin set to land on Polkadot and Kusama

Polkadot and Kusama users will benefit from a direct integration with Tether’s USDT when common good parachains launch. As announced by Tether on Tuesday, the stablecoin will launch both on Polkadot and Kusama, its cousin network.

Tether (USDT) is the oldest stablecoin to reach significant adoption, and it has recently surpassed $40 billion in circulating supply. Though there have been concerns in the past for its reserve status, the company recently committed and followed through with periodic reserve audits.

The timing of Tether’s release on Polkadot depends on its roadmap and the activation of parachains, the “shards” within the Polkadot network. As Tether’s chief technology officer, Paolo Ardoino, told Cointelegraph:

“Tether will likely launch on the first parachain available, StateMint. We expect StateMint to be the first common goods parachain.”

Common good parachains are a recent proposal within the Polkadot network to provide a neutral ground for building critical features for the network as a whole. Most “normal” parachains are launched by external developers, and sometimes, they may overlap in function and become effective competitors.

Building on a common goods parachain means that the stablecoin maintains neutrality within the wider network, while making its token available in any other parachain thanks to Polkadot’s cross-shard communication framework.

Before deploying on Polkadot, Tether will launch on Kusama, which will itself launch parachains at least a few weeks before Polkadot. Kusama is a “canary network” of Polkadot, a middle ground between a testnet and an independent blockchain. Kusama is a fully functional network that carries economic value, though it is expected to lead the way in implementing new protocol upgrades.

Tether is one of the stablecoins with the widest reach across blockchains, as Polkadot and Kusama add to an already significant list of adopters. These include Bitcoin (BTC), Ether (ETH), Tron (TRX), EOS, Solana (SOL) and Bitcoin Cash (BCH). Tether is also supporting a number of layer-two solutions such as zkRollups and Liquid Network. The decision to release Tether on Polkadot was apparently done with decentralized finance in mind, Ardoino added:

“Our integration with Polkadot serves to support the decentralized finance ecosystems that are growing across blockchains. There has been notable development in Web 3.0 technologies, and we look forward to helping them unlock the internet of value.”