The Merge, in Tether’s opinion, is “one of the most important events in blockchain history.”
Tether, the company behind the USDT stablecoin, has declared its support for the upcoming Ethereum Merge upgrade. With the update, the blockchain’s Proof-of-Work (PoW) consensus will be replaced by a more scalable and energy-efficient Proof-of-Stake consensus (PoS).
After the September 19 update, Circle Pay, the company that created the USDC stablecoin, said that it will only continue to support Ethereum’s PoS chain since “USDC as an Ethereum asset can only exist as a single valid’version’.” Regarding the eagerly awaited achievement, Circle wrote:
“USDC has evolved into a crucial component of Ethereum DeFi innovation. It has aided in the uptake of L2 solutions and expanded the range of use cases that now rely on Ethereum’s extensive set of functionalities. We are aware of our obligations to the USDC-dependent businesses, developers, and end users that make up the Ethereum ecosystem and plan to act responsibly.
In a blog post on Tuesday, Tether agreed, calling the Merge “one of the most important milestones in blockchain history.” Tether also stated that it was their duty to reassure the community of the Merge’s support as the creator of the leading stablecoin on the Ethereum network.
“Tether feels that it’s crucial that the switch to POS not be used as a weapon to sow confusion and havoc within the ecosystem in order to prevent any disruption to the community, especially when using our tokens in DeFi projects and platforms […] Tether will pay special attention to the development and planning for this event and will enable POS Ethereum in accordance with the scheduled time. For the long-term stability of the DeFi ecosystem and its platforms, including those that use our tokens, we think a smooth transition is crucial.
Tether USDT, which trades at 10 times the volume of its nearest rival USDC, is now the most popular stablecoin in the cryptocurrency market. With a market size of $66.53 billion, USDT leads the $153 billion stablecoin market cap, followed by USDC at $54.02 billion, according to statistics from CoinMarketCap. According to Etherscan, USDT has a circulating supply on the Ethereum blockchain of $32.3 billion, whereas USDC has a circulating supply of $45.1 billion. The Merge is anticipated to go without a hitch because to the solid backing of the top two stablecoins. This week’s scheduled Goerli testnet trial will determine whether the upgrade proceeds as planned.
However, Ethereum co-founder Vitalik Buterin has cautioned that the influence these stablecoins have might cause issues in upcoming hard forks.