Tether’s USDT Stablecoin to Join Celo Network

In a move to enable microtransactions and offer USDT transactions at “less than a cent,” Tether has partnered with Celo.

As part of its ongoing strategy to diversify the use of the USDT stablecoin across multiple blockchain networks, major operator Tether has established a strategic partnership with the Celo network.

Connected with Celo, a Layer 1 network that facilitates cheap and fast payments and is compatible with the Ethereum Virtual Machine (EVM), this partnership is poised to enhance the utility of USDT.

According to an announcement by Tether to Cointelegraph on March 11, the new integration brings several advantages for USDT. One of the key benefits is the ability to conduct microtransactions at “exceptionally low, less than a cent transaction costs” (approximately $0.001).

An individual close to the company, in conversation with Cointelegraph, mentioned that since its launch in April 2020, the ability to make cheap, fast payments anywhere in the world has been a key feature of Celo. An Ethereum representative commented, “Indirectly, as an L2, there was value sharing with Ethereum, which is not the case today as an L1.”

Beyond USDT, the Celo platform will also offer many other stable assets, such as Mento’s eXOF (tracking the West African CFA franc) and cREAL (tracking the Brazilian real). Remittances, savings, loans, and cross-border payments are some of the use cases for stable assets on Celo.

Rene Reinsberg, Co-founder and Chairman of the Celo Foundation, expressed excitement about the addition of Tether USDT to the Celo ecosystem and praised the company’s rapid growth as a leader in stablecoins and real-world assets.

Reinsberg stated, “Everyday consumers worldwide will benefit from robust stablecoin use cases, as well as more alternatives for fast, low-cost payments using Tether USDT, which will soon be available on Celo.”

Tether officials have not evaluated when the Celo blockchain will activate the first USDT issuance. Circle’s USD Coin (USDC), a primary competitor to USDT, has announced its debut on the Celo network in January 2024. On February 22, Circle announced that the first USDC is accessible on Celo.

The Celo-based USDT will join the 14 blockchains currently supported by Tether, in addition to Tron, Ethereum, Solana, Avalanche, and Omni. The Tether Transparency report states that as of this writing, 50% of all USDT is on the Tron blockchain, and 45% is on the Ethereum blockchain, making them the two largest USDT blockchains.

With the price of Ethereum (ETH) rising above $4,000, the cryptocurrency community’s outcry over the high fees charged by the Ethereum network has grown louder. The soaring ETH fees, necessary for ERC-20 Tether USDT transactions, have also impacted USDT based on Ethereum.

An insider revealed that Celo does not rely on Ethereum to charge network fees, even though it is an EVM-compatible network. “For instance, due to specific architectural decisions, an increase in Ethereum fees does not necessarily mean that L2 prices will rise in the same manner or at all,” the individual noted.

Sentiment: Positive