Hot on the heels of USD Coin (USDC) issuer Circle Pay’s official announcement, stablecoin giant Tether has just officially confirmed its support for Ethereum’s upcoming Merge upgrade and move to a blockchain based on a proof-of-concept (PoS) mechanism. .
This announcement was made on the same day as its stablecoin competitor, which only promised to support the much-anticipated Ethereum upgrade.
In a statement on Tuesday, Tether called the merger “the most important moment in blockchain history” and emphasized that it will work according to Ethereum’s upgrade schedule, including the implementation date currently set for 19 September:
“Tether believes that in order to avoid any disruption to the community, especially when using our tokens in DeFi projects and platforms, it is important that the transition to POS is not weaponized to cause harm , confusion and damage within the ecosystem”.
“Tether will closely monitor the progress and preparations for this event and support the transition to Ethereum POS according to the official schedule. We believe a smooth transition is essential to the long-term health of the DeFi ecosystem and its platforms, including those using our tokens,” Tether added.
Although the official statement was only released today, the CTO of the stablecoin issuer Paolo Ardoino already indicated in July that they plan to support Eth2 post-merger.
I meant that we plan to support ETH2.
— Paolo Ardoino (@paoloardoino) July 31, 2022
I meant that we plan to support ETH2. — Paolo Ardoino (@paoloardoino) July 31, 2022
Tether (USDT) is currently the largest stablecoin in the crypto industry, with a total market capitalization of $66.6 billion, while USDC is quite close behind at $54.1 billion, according to CoinGecko. Both stables have a significant amount of their supply circulating on Ethereum’s proof-of-work (PoW) blockchain, with USDT at $32.3 billion and USDC taking the highest point at $45.1 billion at the time of writing.
Given the size of these stables and their dominance in the stablecoin market, this show of support in this case should result in a smooth transition for the Ethereum, Tether, and USD Coin ecosystems, as well as the broader crypto market in general .
Also Read: Institutions Flock To Ethereum For 7 Straight Weeks As Merger Approach: Report
However, as Ethereum co-founder Vitalik Buterin recently warned, their power could cause problems in future Ethereum forks, as centralized entities such as Tether and Circle can opt out of the blockchain resulting in the use of forking of their own choice rather than what the Ethereum community has recommended.
“I think it will become more of a concern in the more distant future. Basically, USDC’s decision on which blockchain to consider Ethereum could be a big deciding factor in future controversial hard forks,” he said.
Stablecoin issuers (Circle/Tether) control the choice of fork in Ethereum.
What happens when the state pressures Circle to support a fork that goes against the “community social contract?” https://t.co/dP7ZPFiJ0u
— Brandon Quittem (@Bquittem) August 6, 2022
Stablecoin issuers (Circle/Tether) control the choice of forks in Ethereum. What happens when pressure forces Circle to support a fork that goes against the “community social contract”? https://t.co/dP7ZPFiJ0u — Brandon Quittem (@Bquittem) August 6, 2022
This week, Ethereum will undergo its final merge test via the Goerli testnet, and if all goes according to plan, the merge date is expected to be September 19th. delay.