Tether’s USDT Goes Live on Algorand
USDT demonstrates Algorand's flexible token standard
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Tether has launched a version of its dollar-pegged stablecoin (USDT) on Algorand, representing the first significant use of Aglorand’s Standard Asset (ASA) specification.
The news was revealed in an announcement published by the stablecoin company on Feb. 10.
Algorand itself is designed to act as a highly scalable blockchain, offering features such as fast confirmation times and low transaction fees. It also offers “pure proof of stake” and a permissionless blockchain, aiming to allow as many participants as possible to engage in consensus.
However, like most cryptocurrencies, Algorand’s native token (ALGO) does not provide price stability. Combined with Tether, it can provide the best of both worlds, according to the announcement:
Algorand users will have access to Tether, the most liquid, stable medium of exchange … Tether’s implementation on Algorand will benefit from block confirmation in under four seconds and transaction fees that are a fraction of a percent, unlocking the opportunity for micropayments on blockchain.
Tether first announced its plans to launch on Algorand in July 2019. However, the decision appears to depend on features that were not present until Algorand’s 2.0 upgrade, which occurred in December.
Tether’s Expanding Domain
Tether’s arrival on Algorand represents another step forward in Tether’s ongoing multi-blockchain expansion. USDT originated on Bitcoin’s Omni Layer in 2014, and it has since gone live on numerous other blockchains including Ethereum, EOS, the Liquid Network, and TRON.
Tether has also launched several stablecoins tied to assets other than U.S. dollar. Currently, the company offers stablecoins backed by the Euro, the Chinese Yuan, and gold bars.
Though Tether is controversial due to the fact that it is difficult to audit in full, the company reportedly has $4.6 billion worth of collateral under its control—making USDT the most significant stablecoin by far.
Algorand Standard Assets
On Algorand’s side, Tether’s decision to issue USDT on its blockchain represents the first time its Algorand Standard Asset (ASA) specification has been used in a significant way.
Developers can use the ASA standard to create several types of tokens, including cryptocurrencies, reward points, non-fungible collectible tokens, security tokens, real estate deeds, and much more. Algorand lists over 15 possible use cases on its website.
However, in a broad sense, this standard is not so different from the token standards offered by relatively popular blockchains like Ethereum and Binance Chain.
It remains to be seen whether Algorand’s promise of interoperability, scalability, and custom control over circulation will help it attract adoption—though further adoption is clearly a possibility.