The Latest Moves of Stablecoin Giant Tether

Recently, the world's largest stablecoin issuer Tether has launched a series of strategic moves aimed at expanding its stablecoin empire.

As a leader in the stablecoin industry, Tether has achieved enormous profits through the global circulation of USDT. Relying solely on government bond interest, its annual revenue has reached as high as $13 billion, making it one of the most profitable fintech companies in the world. However, Tether has found that although it profits significantly from the issuance and management of USDT, it does not have much revenue in terms of true "on-chain economic sharing."

Ethereum incurs about $100,000 in Gas fees daily, contributed by USDT, accounting for over 6% of the entire network's transaction fees. In the case of Tron, the influence of USDT is even more astonishing - its transaction volume and Gas consumption account for over 98% of the entire public chain. The Tron network generates over $2.1 million in on-chain revenue daily, translating to an annualized income of up to $770 million, with the vast majority coming from the high-frequency transaction fees of USDT.

For Tether, this is a typical "value capture imbalance". USDT has brought significant user traffic and industrial demand, but the on-chain transaction fees and ecological dividends have long been "taxed" by the infrastructure, rather than being dominated by Tether. This not only weakens Tether's strategic position in future on-chain payment and settlement networks, but also causes it to lose initiative when facing new threats.

In order to change this situation, Tether is fully committed to the construction of its own stablecoin chain ecosystem. Through a dedicated chain model, Tether can not only "reclaim" the huge transaction fees and ecological dividends that would originally flow to other public chains back into its own system, but also establish its own on-chain closed loop in areas such as B2B payments, compliant settlements, and industrial collaboration.

Plasma: Tether's Secret Weapon

By the end of 2024, Tether quietly supported a new chain called Plasma. In just two months, Plasma secured $27.5 million in funding from investors including Bitfinex, Peter Thiel's Founders Fund, Framework, and others, rapidly reaching a valuation of $500 million.

Plasma uses the Bitcoin mainnet as the final settlement layer, inheriting the security of UTXO, while being directly compatible with EVM at the execution layer. The most crucial point is that all on-chain transactions can be directly paid with USDT for gas, and the transfer of USDT is completely free.

It was precisely the simple and direct selling point of "zero fees" that sparked a buying frenzy for Plasma when it launched the governance token XPL quota. The first batch of $1 billion was snapped up in just 30 minutes, with some large holders even willing to pay $100,000 in gas fees on the Ethereum mainnet to get access.

In addition to the technical architecture, Plasma also has two major highlights: first is "native privacy", where users can selectively conceal transaction information; second is "Bitcoin liquidity", which promises to seamlessly introduce native BTC on-chain. This aligns with Tether's recent massive increase in Bitcoin holdings.

Through Plasma, Tether can not only gather the 150 billion USDT scattered across various networks into a unified clearing layer, but also control the entire process of issuance, circulation, and redemption, thereby gaining more pricing power and voice.

Stable: USDT Dedicated Chain for Institutions

Following Plasma, Tether has launched an L1 public chain named Stable, focusing on institutional-level application scenarios. Unlike Plasma, which targets retail investors, Stable is aimed at global financial institutions, corporate settlements, large-scale clearing, on-chain corporate finance, B2B cross-border transactions, and other fields.

The clues of Stable's implementation are hidden in Tether's recent intensive investments in bulk commodities. From acquiring South American agricultural giants, to investing in African blockchain financial platforms, and even taking stakes in Canadian gold mining companies, Tether is embedding USDT into various segments of the real economy.

For commodity traders, the high-efficiency clearing capabilities provided by Stable are far superior to traditional wire transfers. For Tether, this part of the traffic is more stable and has a higher margin than retail transfers. More importantly, Stable allows Tether to directly integrate the on-chain captured dollar flow into commodity trade and even the entire supply chain.

U.S. Domestic Stablecoin Initiative

Tether CEO Paolo Ardoino recently revealed that the company may establish a new entity in the United States to issue a new stablecoin specifically for local payment scenarios, while the existing USDT will continue to focus on the international market.

This plan relies on the support of the American banking industry. There are indications that Tether may collaborate with the first major bank in the U.S. that has explicitly stated its willingness to issue stablecoins. Additionally, Cantor Fitzgerald, led by former Commerce Secretary Howard Lutnick from the Trump era, which currently manages Tether's billions of dollars in Treasury positions, may also become an important backing for the new stablecoin.

Despite facing regulatory pressure in the United States, Tether is reducing policy risks through various means, including relocating its registration to Bitcoin-friendly El Salvador and making high-profile purchases of hundreds of billions in U.S. Treasuries in the bond market.

Through Plasma, Stable, and the upcoming domestic payment coin in the U.S., Tether is building a comprehensive stablecoin ecosystem that covers all aspects from retail payments to commodity settlement, further consolidating its dominant position in the global stablecoin market.