Aug 10th 2022
The issuers of the largest stablecoins have expressed their support for the Ethereum blockchain network’s transition to the Proof-of-Stake algorithm.
Tether and Circle, issuers of the largest stablecoins USDT and USDC, expressed their full support for Ethereum’s transition to PoS during The Merge update.
Circle released a statement on Tuesday, August 9, noting the importance of USDC to Ethereum’s DeFi sector. After the merge, they confirmed unconditional support for Ethereum’s core blockchain, saying they were excited about the scalability and lower power consumption opportunities opening up for the network.
The company has already tested its algorithms in the Goerli testnet, so they are confident in the success of the project’s future transition to PoS. However, the company plans to keep a close eye on the latest test merge between Goerli and Prater, scheduled for mid-August. Currently, USDC is the biggest Ethereum-based stablecoin tied to the dollar and the largest ERC-20 asset overall, with a market cap of over $45 billion.
Tether made similar announcements hours apart, calling the future merge “one of the most significant moments in blockchain history.” The company also intends to closely monitor preparations and the future transition of Ethereum to PoS. In their statement, Tether did not fail to mention that the trading volume of ERC-20 standard USDT is 10 times higher than that of its “closest competitor” and that Tether has 3 times more users than any other stablecoin. Overall, it is the most used stablecoin on the Ethereum blockchain.
Both companies support a smooth transition and numerous test merges to avoid potential mistakes and market turmoil.
These statements came in response to Vitalik Buterin’s remarks during his speech at BUIDL Asia in Seoul. Buterin emphasized the importance of large stablecoin issuers during future controversial Ethereum hard forks, as they may not support the community’s ideas by choosing to continue using branches of the main Ethereum chain.
The final phase of The Merge update is tentatively scheduled for September 19, 2022. Until then, the final merge of the testnets Goerli and Prater remains to be done. Earlier, the Sepolia and Ropsten testnets were successfully merged with Beacon Chain in preparation for Ethereum’s eventual transition to Proof-of-Stake.
Images courtesy of Unsplash, Istock & Feepik