Tether announced on January 6th that it will undertake a chain swap with the Tron Network in collaboration with big exchanges.
According to the official announcement, Tether and the exchange will work together to transfer some of the third-party provider’s Tether (USDT) stored in cold wallets to the Tron (TRX) network.
Without changing the total amount of USDT in circulation, the operation will transfer $1 billion worth of USDT from several blockchains to the Tron network.
What is A Chain Swap?
One method of exchanging tokens between blockchains is a chain swap, sometimes referred to as a cross-chain swap. Users can move assets between blockchains directly with a chain swap, bypassing the need for a centralized exchange (CEX).
Through improved blockchain interoperability, many blockchains can interact and conduct transactions with one another.
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What Will Tether’s Chain Swap Include?
According to the strategy disclosed on Tether’s official X account, some USDT held in cold wallets would move to the Tron blockchain. Tether’s response to changing market conditions is shown in this calculated move, which aims to improve user accessibility across many networks.
Chain swaps usually make it possible for stablecoins to move across blockchains with ease, giving traders more options for transactions and trading between platforms.
Because it enables traders to use their digital assets on any supported blockchain, a chain swap is essential to the trading market. With billions of dollars being transferred every day as users use it for cross-border transactions, trading, and payments, Tether’s flagship stablecoin is a significant participant in the cryptocurrency market.
Therefore, the chain swap will give investors a good change to swap thier asset to TRON network.
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Tether’s Chain Swap Comes As USDT Volumes Take a Tumble
Tether’s announcement on the chain swap comes at a time when the overall volume of USDT transactions has tumbled a little. However, this might just be the lag in the overall market due to the end-year slop in trading.
The recent multibillion-dollar drop in Tether’s USDt market value and volumes is insufficient to indicate a pessimistic shift on markets.
At present, Tether’s USDT stablecoin has had a 2.8% decline in market capitalization since reaching a peak of $141 billion on December 19, 2024.
In recent weeks, USDT trading has also experienced a sharp drop, with daily volumes falling 64% from approximately $154 billion in mid-December to $55 billion on January 6, 2025.
The EU regulations and probable ban has led to a drop in trading volume. Many traders are shifting to other stablecoins like USDC.
But the declining trend of USDT is probably due to a holiday-related delay in trade and should not be correlated with a bearish change in cryptocurrency markets.
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