Following an announcement by Circle Pay (USD Coin) issuer Circle Pay about its support for Ethereum’s Merge upgrade and transition to a Proof of Stake (PoS-based blockchain, Tether is now officially supporting the project.
It was announced on the same day that its stablecoin rival, who also pledged to support Ethereum’s much-anticipated upgrade.
Tether declared the Merge as one of the “most important moments in blockchain history” in an August 9 statement. It also stated that the Merge will be in compliance with 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 issues, had indicated in July that they would support the post-Merge ETH2.
That was my intention. We plan to support ETH2.
— Paolo Ardoino (@paoloardoino) July 31, 2022
USDT is the current largest stablecoin in crypto, with a total market capital of $66.6 billion. USDC comes close at $54.1 billion, according to CoinGecko. Both stablecoins currently have significant amounts of their circulating supply on Ethereum’s Proof-of-Work blockchain. USDT is at $32.3 billion, while USDC is at $45.1 billion.
These stablecoins are huge and have a strong market share. This support should ensure a smooth transition for both the USDT, USDC and Ethereum ecosystems as well as the wider crypto market.
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Vitalik Buterin warned that their power could cause problems in future Ethereum hardforks. Central entities like Circle and Tether could choose to use the forked chain of their choice, instead of what the Ethereum community suggests.
“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.
Stablecoin issuers, Circle/Tether, control Ethereum’s fork selection. What happens when the state pressures Circle to support a fork that goes against “eth community social contract?” https://t.co/dP7ZPFiJ0u
— Brandon Quittem (@Bquittem), August 6, 2022
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.