Tether has launched a dollar-denominated version of its stablecoin (USDT) on Algorand, marking the first significant use of the Algorand Standard Asset Specification (ASA). The news was revealed in an announcement published by the stablecoin company on February 10.
Algorand itself is designed to act as a highly scalable blockchain, offering features such as fast confirmation times and low transaction fees. It also offers pure proof of stake and a permissionless blockchain, aiming to enable as many participants as possible to reach consensus.
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However, like most cryptocurrencies, Algorand's native token (ALGO) does not provide price stability. Combined with Tether, it can provide the best of both worlds, according to the announcement:
“Algorand users will have access to Tether, the most liquid and stable medium of exchange… The implementation of Tether on Algorand will benefit from block confirmation in less than four seconds. And transaction fees that are a fraction of a percent, unlocking the opportunity for micropayments on the blockchain.”
Tether first announced its release plans on Algorand in July 2019. However, the decision appears to hinge on features that weren't present until Algorand's 2.0 update, which occurred in December.
Tether's expanding domain
Tether's arrival on Algorand represents another step forward in Tether's ongoing multi-chain expansion. USDT originated on Bitcoin's Omni layer in 2014 and has since been deployed on many other blockchains , including Ethereum, EOS, Liquid Network, and TRON.
Tether has also launched several stablecoins pegged to assets other than the US dollar. Currently, the company offers stablecoins backed by the euro , the Chinese yuan, and gold bullion. Although Tether is controversial due to the difficulty of fully auditing it, the company reportedly has $4.6 billion in collateral under its control. This makes USDT the most significant stablecoin at the moment.
Algorand standard assets
For Algorand, Tether's decision to issue USDT on its blockchain marks the first time its Algorand Standard Asset Specification (ASA) has been used in a significant way. Developers can use the ASA standard to create various types of tokens, including cryptocurrencies, reward points, non-fungible collectible tokens, security tokens, real estate titles, and much more. Algorand lists over 15 potential use cases on its website.
However in a broad sense. This standard is not that different from the token standards offered by relatively popular blockchains such as Ethereum and Binance Chain. It remains to be seen if Algorand's promise of interoperability, scalability, and personalized control over circulation will help it drive adoption. Although further adoption is clearly a possibility.
