Major stablecoin operator Tether continues to expand its USDT stablecoin across various blockchain networks, entering a strategic collaboration with the Celo network.
Tether (USDT) on Celo, an Ethereum Virtual Machine (EVM)-compatible layer-1 network designed for fast and low-cost payments.
Announcing the news to Cointelegraph on March 11, Tether noted that the new integration brings a range of benefits to USDT, including “notably low, sub-cent transaction fees” hovering around $0.001, enabling feasible microtransactions.
“One of Celo’s core features since launching in April 2020 was its design for fast, low-cost payments worldwide,” a source close to Celo told Cointelegraph. “Indirectly, as an L2, there is a value sharing happening with Ethereum that’s not happening today as an L1,” a spokesperson said, adding:
“In transitioning to an Ethereum L2, gas fees would stay low, critical to achieving global prosperity and core to the Celo community mission.”
USDT will join an array of stable assets available on the Celo platform, including Mento’s eXOF, which tracks the CFA franc, and the cREAL, which tracks the Brazilian real. The use cases for stable assets on Celo include remittances, savings, lending and cross-border payments.
“We are thrilled to welcome Tether USDT to the Celo ecosystem, which is fast becoming a leader in stablecoins and real-world assets,” Celo co-founder and foundation president Rene Reinsberg said.
“With Tether USDT soon available on Celo, users have even more options for fast, low-cost payments and access to robust stablecoin use cases that benefit everyday users around the world,” Reinsberg noted.
A Tether representative declined to say when the first batch of USDT will be issued and go live on the Celo blockchain.
Related: Tether launches recovery tool to migrate USDT between blockchains
USDT’s major rival, the Circle-issued USD Coin (USDC), announced a native launch on the Celo blockchain in January 2024 as well. Circle said the first USDC became available on Celo on Feb. 22.
Celo-based USDT will join 14 blockchains currently supported by Tether, including Tron, Ethereum, Solana, Avalanche and Omni. Tron and Ethereum are the two largest blockchains for USDT at the time of writing, accounting for 50% and 45% of all issued USDT, respectively, according to Tether Transparency.
The news comes amid the crypto community increasingly complaining about high fees on the Ethereum network as Ether (ETH) prices pass $4,000. Skyrocketing ETH fees have also impacted Ethereum-based USDT, as ERC-20 Tether USDT requires ETH gas fees to complete transactions.
Despite Celo being an EVM-compatible network, there is no dependency on Ethereum in terms of network fees, according to a source close to Celo. “For example, if Ethereum fees go up, it doesn’t mean L2 fees, given certain architectural choices, go up in the same way or at all even,” the person noted.