The Tether company has quickly made an impact in the world of cryptocurrencies. Although there are some concerns about the company and its liquidity, it is moving ahead in an effort to expand its presence. Its latest venture involves using both USDT and EURT on top of the Ethereum blockchain. It is a pretty interesting development, considering that both of these currencies are compatible with the ERC20 token standard.
ETHEREUM-BASED EURT AND USDT HAVE ARRIVED
It is always interesting to see how companies deal with the concept of fiat-backed stablecoins. Although Tether has built up a rather solid reputation in this regard, there are still people who voice concerns over its actual fiat currency reserves. Whether or not any of those concerns are valid remains to be determined. For now, we have to focus on the positive news first and foremost. Tether has officially embraced the Ethereum blockchain, which is a rather interesting decision.
More specifically, Tether has announced that it has introduced both USDT and EURT tokens on top of the Ethereum blockchain. As a result, it is now possible to transfer these USD and EUR-backed tokens over the Ethereum network. The company is confident this will spell a bright future for all Ethereum-based protocols and decentralized applications making use of this technology. It’s an interesting step forward for both Tether and Ethereum; that much is evident.
Do keep in mind that these new tokens will not replace the Bitcoin-based USD Tether, which is issued through the Omni Layer Protocol. Instead, these new ERC20-compatible tokens are designed to complement the existing Bitcoin-based versions. These USDT and EURT tokens will be completely separate from their Bitcoin-based counterparts. The tokens are not cross-chain compatible, which should make it easy to keep tabs on both versions without too much friction.
One of the main reasons for Tether to explore the Ethereum network is the latter’s lower transaction fees. Moreover, compared with Bitcoin, the Ethereum-based tokens will confirm a lot faster. Although it remains to be seen if there is sufficient interest in these new tokens, it is evident that Ethereum’s network has some advantages over Bitcoin in terms of usability, costs, and speed. Moreover, these new tokens should allow for more efficient exchange arbitrage, assuming the tokens are integrated by some of the more popular exchanges in the near future.
Given the vast number of projects being built on top of the Ethereum blockchain, it simply made sense for Tether to introduce these new tokens. Such projects can now benefit from the introduction of fiat-backed tokens which can be transferred across the same blockchain. The only potential issue is that the Ethereum blockchain has gotten clogged up several times in the past already. Whether or not it will be able to handle this extra “traffic” remains to be seen.
At the time of writing, it seems around US$110,000 worth of USDT has been authorized on the Ethereum blockchain, compared with EUR 14,585,500 worth of EURT. This is a rather interesting development, considering that EURT is far less popular than USDT when issued on top of the Omni Layer. It will be interesting to see how all of these statistics will change in the next few weeks and months. All things considered, this may be a very smart move on the part of Tether, although it is still too early to gauge the full impact of these new tokens.
Source: https://themerkle.com
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