Per CNBC

Tether, the crypto giant behind USDT, the most popular stablecoin, said that it would be buying Bitcoin to back its stablecoin. The amount that they would spend is roughly around $222 million.

For those that don't know, USDT isn't just the most popular but also the largest stablecoin in the market, with a circulating supply of over 82.8 billion per CoinGecko. As of press time, the site also shows that the stablecoin has a $83 billion market cap.

The company said that it wanted to diversify, and to do this, it would place 15% of its net profits into Bitcoin. The diversification efforts come as Tether is trying to back its USDT token.

The USDT token, like other stablecoins, aims to stick to the value of the US dollar, which would ideally make it a 1:1.

A Tether spokesperson gave a statement about their decision to diversify and clarified that its Bitcoin purchase wouldn't take up a huge part of its overall net profit. Most of the excess income that Tether incurs was reportedly spent on banking fees and other things related to business expenses.

“The aim is to keep the Bitcoin portfolio value well below the size of our total excess reserves that accounted for 2.48B at the end of Q1/2023, while bitcoin holdings accounted for 1.5B,”

In December, Coinbased encouraged its users to abandon USDT for USDC. To do this, the platform said that they would be covering their conversion fees, meaning all expenses from switching stablecoins would be waived.

This was due to the previous scrutiny on Tether, with questions being asked as to whether it was really backed 1:1.

In March, Circle of USDC said it had $3.3 billion of its $40 billion USDC reserves stored at Silicon Valley Bank.

See flow at unusualwhales.com/flow.

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