Since the significant drop in Bitcoin's value on March 12, Tether (USDT) has embarked on a remarkable journey of rapid issuance. From March to the present, Tether Limited has conducted over 20 separate issuance events, moving from initial batches of 60 million USDT to later ones of 120 million USDT. The scale of each issuance has continually expanded, with the total additional supply exceeding $1.5 billion.
A Timeline of USDT Issuance Expansion
The series of issuances began on the afternoon of March 5, when Tether released 200 million ERC20 USDT tokens. It is important to note that this particular issuance was part of a pre-announced process to switch USDT from other blockchains to the ERC20 standard in collaboration with the Binance exchange. Therefore, strictly speaking, it should not be grouped with the broader March issuance activities.
Later that same day, at 11:49 PM, Tether initiated another issuance of 60 million ERC20 USDT, effectively marking the true start of the March issuance series. Before Bitcoin's major decline on March 12, Tether had already issued USDT on four occasions, totaling 240 million tokens.
Following the sharp downturn in the digital currency market, off-exchange USDT premiums quickly surged, reaching as high as 6%. This environment allowed Tether to continue its aggressive issuance strategy throughout March, with the pace and scale of issuance accelerating noticeably.
Data indicates that on March 12 at 3:52 PM, Tether issued 60 million USDT on the Ethereum network. Then, less than seven hours after the market crash, at 1:36 AM on March 13, another issuance of 60 million USDT occurred on the same network. By 9:39 PM on March 20, Tether had conducted nine separate issuances, adding a total of 540 million USDT to the market. The intervals between these issuances varied widely, with the longest gap being four days and the shortest just seven hours.
Subsequently, between 1:11 AM on March 25 and 9:20 PM on March 31, Tether executed four additional issuances over a six-day period. Each of these was for 120 million USDT, bringing the total for this phase to 480 million USDT. This broke the previous pattern where the maximum single issuance had been 60 million.
Moving into April, as of April 14, Tether had already conducted five separate issuances, totaling 420 million USDT.
Where Did the Newly Issued USDT Go?
Such large-scale stablecoin issuance is rare in financial markets, naturally leading to questions about where all these new tokens are flowing. Beijing Chain Security conducted an in-depth analysis, tracking five layers of USDT transactions and compiling statistics on 2,206 transfers where the recipient was clearly identified as an exchange. These transactions amounted to 1,024,355,775.63 USDT.
From the recipient perspective, the March issuances involved a wide array of institutions and exchanges. At least 17 distinct business entities, including well-known exchanges and institutions such as Binance, Huobi, Bitfinex, OKEx, Nexo, KuCoin, RenrenBit, FTX Exchange, Gate.io, Poloniex, and HitBTC, participated in the distribution process.
However, the primary distribution channels were Binance, Huobi, and Bitfinex—the latter of which has known affiliations with Tether. Together, Binance and Huobi accounted for 86% of the distributed volume, underscoring their dominant activity levels in the trading market.
According to data from Beijing Chain Security, Binance received the largest share: 584,663,116.80 USDT, representing over half of the total (57.08%) across 767 transfers (34.77% of total transactions). Huobi followed, receiving 299,725,950.02 USDT (29.26% of the total) through 1,156 transfers (52.40% of total transactions).
This distribution pattern is logical given market structures. Binance, Huobi, and Bitfinex are all leading global exchanges with active trading pairs involving USDT. Binance, in particular, ranks among the top platforms for spot trading volume globally, making it a natural destination for significant USDT inflows. Notably, several previous large-scale conversions between OMNI USDT, TRC20 USDT, and ERC20 USDT were initiated through Binance, solidifying its role as a key liquidity hub for on-exchange trading.
Huobi dominates in the over-the-counter (OTC) market, where many users purchase USDT before transferring it to Huobi or other platforms for trading. This positions Huobi as a critical junction between OTC and on-exchange activities.
Furthermore, by examining the daily inflow of newly issued USDT into exchanges alongside the USDT premium rate, it becomes evident that the increased supply effectively helped adjust market conditions. On days with substantial USDT inflows, the premium rate—which had spiked sharply after March 12—began to decline, demonstrating how issuance can balance supply and demand while reducing excess premiums.
Behind the Issuance: Growing Demand for Stablecoins
In the past, large-scale USDT issuances by Tether have faced strong criticism from the market. However, this recent wave of substantial issuances has encountered noticeably less opposition. The primary reason is a significant increase in market demand for stablecoins.
Following Bitcoin's sharp decline, the cryptocurrency market lost hundreds of billions of dollars in value, with the highest drop nearing 50%. This created a widespread shortage of capital, leading to excess demand for USDT and driving its premium to as high as 6%. In this context, Tether's repeated issuances helped meet market demand, subsequently reducing the USDT premium and lowering transaction and investment costs—a move welcomed by many investors.
It is worth highlighting that Tether is not the only stablecoin seeing increased issuance. Other major stablecoins have also experienced growth in circulation.
According to data from CoinMetrics, in March alone, USDT's circulating supply increased by 51.5%, USDC's by 55.4%, PAX's by 26.5%, and HUSD's by 74.7%. The top four stablecoins by market capitalization all saw significant issuance growth during this period.
This rising demand for stablecoins stems from increased user need for derivatives, safe-haven assets, and cross-border transfers. The derivatives market, in particular, is generating ever-growing demand for USDT.
Since the second half of 2019, Tether had already been gradually increasing USDT issuance, albeit at a slower pace. This coincided with unprecedented growth in the cryptocurrency derivatives market, where exchanges developed various trading products—such as those using USDT as margin for betting on price movements—that require stablecoin participation. After 2019, a major use case for USDT became involvement in derivatives markets. As more participants entered the crypto derivatives arena, demand for USDT naturally rose.
The March 12 crash prompted some investors to shift from a Bitcoin-standard to a fiat-standard approach, converting cryptocurrencies into USDT as a safe-haven move. This directly fueled additional demand for USDT.
A third factor driving USDT demand is cross-border circulation needs. Some analysts suggest that, due to capital controls and a strengthening US dollar amid the pandemic, demand for USDT is emerging not only within the cryptocurrency circle but also outside it.
Minadeo Yang, founder of dForce, believes that traditional cross-border channels have been disrupted by the COVID-19 pandemic, causing demand to spill over into USDT. This has been the biggest driving force behind the recent increase in minting volume. It's not just USDT seeing this trend; nearly all compliant stablecoins have experienced increased issuance. Moreover, it appears that exchange-supported stablecoins, such as Huobi's HUSD and Binance's BUSD, are actively competing for market share with USDT.
Omer Ozden, Chairman of RockTree Capital, has also noted that USDT is the world's most popular stablecoin with the broadest application range. He refers to the current year as the "year of the stablecoin," citing broader adoption, regulatory approvals for some stablecoins, and the release of Libra's whitepaper. Tether's increased issuance is part of this trend, with some of the new supply also linked to USDT-based lending activities in the market.
According to CoinMarketCap, USDT's market capitalization now exceeds $6 billion, having grown by nearly 25% in just one month.
Sam Bankman-Fried, CEO of the derivatives platform FTX and quantitative Bitcoin fund Alameda Research, attributes the rapid rise in USDT's market value to three main factors:
- Over-the-counter (OTC) traders, "primarily from Asia," are seeking to acquire USDT. Although Bankman-Fried did not elaborate extensively, it is well-known that Chinese traders often use Tether because they have limited access to cryptocurrency markets through other means. Some also note that even for those not interested in Bitcoin trading, USDT serves as an efficient method for moving funds across borders.
- Investors are selling BTC for USDT to hedge their positions.
- Others are selling BTC for USDT to reduce overall risk.
Bankman-Fried explains that these activities collectively drive up demand (and thus the price) of USDT, which in turn incentivizes increased supply—hence the high volume of recent issuance.
It is clear that market demand for stablecoins is rising rapidly. At the same time, suppliers—major exchanges—are continuously feeding this demand with new stablecoin issuance. For stablecoins, this may be an opportune moment to solidify their central role within the cryptocurrency ecosystem.
👉 Explore real-time market analysis tools
Frequently Asked Questions
Why has Tether been issuing so much USDT recently?
The primary driver is a significant increase in market demand. Following the cryptocurrency market downturn in March, many investors sought the stability of USDT, leading to a supply shortage and increased premiums. Tether's issuances helped balance supply and demand, reducing transaction costs.
Which exchanges received the most newly issued USDT?
Data indicates that Binance received the largest share, over 57% of the tracked distribution, followed by Huobi with nearly 30%. These exchanges are key liquidity hubs for both on-exchange and over-the-counter trading.
Are other stablecoins also increasing their supply?
Yes, other major stablecoins like USDC, PAX, and HUSD have also seen significant issuance growth, ranging from 26% to over 74% in March alone, reflecting broad-based demand for stable digital assets.
What are the main use cases driving USDT demand?
Key drivers include participation in derivatives trading, safe-haven conversion during market volatility, and cross-border money transfers—especially in regions with limited access to traditional banking or facing capital controls.
Did the increased USDT supply affect its market price?
Yes, the new issuances helped reduce the USDT premium that had spiked after the market crash. By increasing supply, Tether helped stabilize the price closer to its intended $1 peg.
Is the growth in stablecoin issuance a temporary trend?
While market volatility has accelerated demand, the broader trend of stablecoin adoption appears sustainable, supported by growing use in derivatives, remittances, and as a risk-management tool in crypto investing.