Tether and Circle Go On $2.8 Billion Token Minting Spree

Tether and Circle have been issuing stablecoins at a breakneck pace, minting just under $3 billion in fresh tokens in the last 24 hours. USDT and USDC transaction volumes are pretty stable, and it’s unclear why they need this liquidity.

With impending stablecoin regulations and the persistent lack of a third-party audit, these mintings engendered community skepticism. Hopefully, we’ll get some clear answers about this behavior.

Tether and Circle Mint Tokens

The stablecoin market is very hot right now; recent data shows that token supply and trade volumes reached an all-time high last month, even if a significant chunk of activity comes from bots.

Competing firms are finding novel ways to muscle into this market, while Tether and Circle are aiming to maintain their leading positions.

In this environment, both of these corporate giants went on a minting spree, issuing just under $3 billion in fresh tokens in the last 24 hours:

Tether and Circle have both been minting a ton of assets lately; the former company issued around $5 billion in new stablecoins a week and a half ago, while the latter has been making smaller commitments. Regardless, both issuers can use these tokens to inject monumental new liquidity into the entire Web3 ecosystem.

Community Skepticism and Unclear Motives

Still, it’s not immediately clear why the two companies are behaving in this manner. Sure, Tether is aggressively trying to boost its valuation, but that wouldn’t necessarily influence Circle.

Neither USDT nor USDC has seen substantially inflated transaction volumes either, ruling that out as a viable explanation.

Between this activity and other bearish market signals, there has been some social media speculation about a market pump. Considering that Tether still has yet to undergo a third-party audit, some analysts are disparaging the stablecoins’ long-term value and viability:

The GENIUS Act could ban these stablecoins unless they both meet extensive compliance rules, but Tether does not seem worried about the issue. Both Tether and Circle would need to submit to regular third-party audits, and neither party has done so.

They would also need to hold US Treasury bonds for every issued token, and there’s no proof that they have these reserves. Both companies have been buying Treasuries at extreme rates, but it’s nowhere near the corresponding amount of stablecoins.

In other words, there are a ton of unanswered questions about these stablecoin minting sprees.

Until we get more concrete information, bearish speculation about Tether and Circle could continue for the foreseeable future.

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