$15M of Tether Moves to Liquid Sidechain

On January 7, Tether conducted a cross-chain swap of $15 million USDT reserves from Ethereum to Liquid, a federated Bitcoin sidechain for exchange settlement developed by Blockstream. Although support for USDT on Liquid was first announced in July 2019, the decision to finally convert some USDT over to Liquid was driven by customer demand, according to Tether CTO Paolo Ardoino.

Why it matters:

• 2019 saw USDT migrate in mass from Bitcoin’s Omni layer to Ethereum, whose ERC-20 standard provided increase speed and efficiency over assets issued on Omni. Ethereum now hosts the majority of USDT in existence. The enhanced privacy offered by Liquid through confidential assets and transactions may provide a compelling reason for the pendulum to swing back towards Bitcoin for USDT issuance.
• Blockstream’s Liquid sidechain has been off to a slow start since it launched in October 2018. However, private USDT transaction alleviates a notable pain point for traders who will now be able to move assets around exchanges confidentially.
  

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