In the first week of April, the weekly trading volume for Tether (USDT) on the Tron network reached an astounding $110 billion, indicating a significant increase in the use of stablecoins on the platform.
Based on a recent tweet from IntoTheBlock, twice as much Tether (USDT) was transferred on the Tron network compared to Ethereum in the latest milestone. This demonstrates that Tron continues to be the primary choice for USDT transactions.
USDT Records $110B Volume on Tron
According to IntoTheBlock, the large number of USDT transactions on Tron can be explained by the network’s affordable fees. This feature enables users to effortlessly obtain the USD-pegged asset.
Recently, CryptoPotato announced that the number of USDT transactions per day on the Tron network had been climbing up to record highs last seen in January 2023. On average, around two million transactions were being processed daily. This trend started in February.
The value of Tether’s market capitalization has recently surpassed $100 billion, making it even more influential in the realm of stablecoins. This digital asset, which can be found on 15 diverse blockchains and protocols, sees a large chunk of its existence housed within the Tron network.
Recently, it was found by Reflexivity Research that around 94% of the value locked in stablecoins on Tron is held by USDT. Furthermore, USDT accounted for over 95% of the activity on Tron’s smart contracts. The significant usage of USDT leads to a high energy consumption on the chain, suggesting that most transactions involving this stablecoin have been for stability purposes with minimal diversification.
USDT Linked to Illicit Activities
With USDT growing more prevalent on the Tron network, so does the occurrence of unlawful transactions. According to a report by blockchain investigation firm TRM Labs, a staggering 45% of all illicit transaction volumes in 2023 took place on Tron. This surpassed Ethereum and Bitcoin, which accounted for 24% and 18%, respectively.
Criminals, including cyber criminals, North Korean hackers, terrorist financiers, and drug sellers, have taken a liking to the Tron network due to its affordable gas fees and stable prices. On this platform, they often swap their ill-gotten and unlawful cryptocurrencies, primarily for USDT, before laundering them through over-the-counter transactions.
Several regulatory bodies have taken notice of the increasing popularity of USDT being used for illegal transactions, with a UN report from January specifically pointing to money laundering and scams in Southeast Asia as concerns. Tether, the issuer of USDT, has voiced disappointment over this focus, arguing that the report fails to acknowledge the beneficial uses of the stablecoin.
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2024-04-10 17:03