Tether stated that “we believe that a smooth transfer is essential for long-term health the DeFi ecosystem, its platforms and those using our tokens,”
Following an announcement by USD Coin ( USDC), issuer Circle Pay, stablecoin giant Tether now officially supports Ethereum’s Merge upgrade and switch from a proof-of stake (PoS), consensus mechanism-based blockchain.
It was announced on the same day that Ethereum’s stablecoin rival, who promised they would only support Ethereum’s eagerly awaited upgrade.
Tether declared Tuesday that the Merge was one of the “most important moments in blockchain history”. It also stated that it will be working in accordance to Ethereum’s upgrade plan, which is currently scheduled to take place on September 19:
“Tether believes that it is important to ensure that there is no disruption to the community. This includes when we use our tokens in DeFi platforms and projects. It’s also important that the transition from POS does not cause confusion or harm to the ecosystem.
Tether will be closely following the preparations and progress of this event and will support POS Ethereum according to the official schedule. Tether stated that we believe a smooth transition was essential for the long-term health of the DeFi ecosystem, its platforms and those using our tokens.
Although the official statement was only made today, Paolo Ardoino, chief technology officer at stablecoin issuers, had indicated in July that they would support the post-Merge Eth2.
According to CoinGecko, Tether ( USDT ) is the most popular stablecoin in crypto at $66.6 billion. USDC comes close at $54.1 billion. Both stablecoins are able to access a large portion of their circulating supply via Ethereum’s current proof of work (PoW). USDT is currently at $32.3 billion, while USDC occupies the top spot at $45.1 billion as of the writing.
These stablecoins are large and have a strong market dominance. This support should ensure a smooth transition for both the USD Coin, Tether, and Ethereum ecosystems as well as the wider crypto market.
Buterin warned that their power could cause problems in future Ethereum hardforks. Tether and Circle, centralized entities, could choose to use the forked chain of their choice rather than the one proposed by the Ethereum community.
“I believe that in the future, this definitely becomes a greater concern. He stated that the USDC’s decision on which Ethereum chain to consider could be a major decision in future contentious hardforks.
Ethereum will be undergoing its final Merge trial via Goerli’s testnet this week. If all goes according to plan, it is likely that the Sept.19 Merge date will not be delayed.