In order to make microtransactions possible and allow USDT with “sub-cent transaction costs,” Tether and Celo have joined forces.
As part of its ongoing strategy to diversify the use of its USDT stablecoin across several blockchain networks, major operator Tether has entered into a strategic partnership with the Celo network.
It is tethered to Celo, a layer-1 network that facilitates cheap and rapid payments and is compatible with the Ethereum Virtual Machine (EVM).
The new integration delivers a number of advantages to USDT, according to Tether’s announcement to Cointelegraph on March 11. One of them is the ability to conduct microtransactions with “particularly low, sub-cent transaction costs” of roughly $0.001.
The ability to make cheap, quick payments anywhere on the globe has been a key feature of Celo since its introduction in April 2020, according to a person close to the company who spoke with Cointelegraph. A representative from Ethereum said, “Indirectly, as an L2, there is value sharing occurring with Ethereum that’s not happening today as an L1.”
Along with USDT, the Celo platform will provide a number of other stable assets, such as Mento’s eXOF (which follows the CFA franc) and the cREAL (which tracks the Brazilian real). Remittances, savings, loans, and cross-border payments are some of the use cases for stable assets on Celo.
Celo co-founder and foundation president Rene Reinsberg expressed his excitement at the addition of Tether USDT to the Celo ecosystem, praising the company’s rapid growth as a stablecoin and real-world asset leader.
“Everyday consumers throughout the globe will benefit from powerful stablecoin use cases and even more alternatives for rapid, low-cost payments with Tether USDT soon accessible on Celo,” Reinsberg stated.
Officials from Tether will not comment on when the Celo blockchain will activate the first USDT issuance. Circle’s USD Coin, USDT’s main competitor, has announced a January 2024 native debut on the Celo network. On February 22nd, Circle announced that the first USDC was accessible on Celo.
In addition to Tron, Ethereum, Solana, Avalanche, and Omni, USDT, which is based on Celo, will join the fourteen blockchains that Tether presently supports. Tether Transparency reports that as of this writing, 50% of all USDT is on the Tron blockchain and 45% is on the Ethereum blockchain, making them the two biggest USDT blockchains.
As the price of Ether (ETH) rises beyond $4,000, the crypto community is becoming more vocal about the excessive fees imposed by the Ethereum network. Since ERC-20 Tether USDT needs ETH gas costs to complete transactions, the soaring ETH fees have also affected USDT, which is based on Ethereum.
According to an insider, Celo is not dependent on Ethereum for network fees, even if it is an EVM-compatible network. “Given particular architectural decisions, for instance, it doesn’t imply L2 prices go up in the same manner or at all, even if Ethereum fees go up,” the individual pointed out.
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