USDT Token Native on Tezos
Today Tether announced at the Money 20/20 Europe conference, that they will issue the USDT native on the Tezos blockchain.
This allows for high-volume transactions to and from Fiat currencies via a CEX to the Tezos blockchain without taking market exposure. As a consequence, we believe that this will be a great boost for the Tezos ecosystem, including its sizable NFT space and also the DeFi space.
We are currently in the process of putting together an amendment proposal to allow for USDT collateral for the uUSD. At first glance this may seem odd and a bit pointless. However, having this possibility has the key benefits that it allows for opportunistic minting
- With lower capital requirements
- With very limited market exposure on the collateral.
This is useful when there is limited market liquidity and/or limited supply in uUSD
- Generally, when a user is looking to purchase a certain fixed amount of uUSD for investment purposes and cannot source them in the market.
- Specifically, when vaults get under-collateralised because of a market crash, and uUSD are scarce, then potential liquidators have the possibility to mint uUSD with relative ease.
In closing we want to reiterate that we are excited about this addition to the Tezos blockchain and we are keen to see the developments that this will facilitate.