Tether announced that it's assisting crypto exchange Binance with a “chain swap,” which involves converting 3 billion USDT to the Ethereum network from the Tron network.
"In a few minutes Tether will coordinate with Binance to perform a chain swap, converting from Tron to Ethereum ERC20, for 3B USDT. The tether total supply will not change during this process," Tether said.
In this case, Tether will be performing a chain swap from the Tron network to the Ethereum network.
USDT is issued as a token issued by Tether on the Ethereum, Tron and other blockchain networks and used to facilitate trading operations on cryptocurrency exchanges such as Binance.
Tether CTO Paolo Ardoino said the transaction is part of Binance efforts to rebalance USDT reserves from its cold wallets on Tron to Ethereum. Here, Binance will send 3 billion USDT from its Tron wallet to Tether’s treasury address on Tron. After this, Tether sends back the same amount of USDT Binance ERC20 cold wallets on Ethereum.
“Likely Binance has mostly USDT-on-Tron in its cold wallets and might want to rebalance its cold wallet, moving part of its Tether reserves to USDT-on-Ethereum,” Ardoino said.
The swap comes at a time when users have been withdrawing large amounts of assets from Binance. Since yesterday, Binance has seen a net outflow of over $2 billion in various crypto assets, according to estimates from Simon Cousaert, director of data at The Block.
Earlier today, Binance temporarily stopped processing withdrawals of another stablecoin — USDC — due to inadequate reserves on the platform, according to Binance CEO Changpeng Zhao.
With reporting assistance from Yogita Khatri.
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