USDT on Telegram's TON. Not Just Another Network Integration For Tether

This week, Telegram announced its users can now start sending money via the stablecoin USDT (or Tether) through The Open Network (TON), a blockchain network integrated within the popular messaging service.

While adding new blockchains is common practice for stablecoins, integrating with TON marks a significant move forward for Tether, extending its reach substantially by tapping into Telegram's huge user base. For TON, the choice to host Tether’s $109 billion market stablecoin is another step in a big year. TON is now the ninth-largest cryptocurrency, fueled in part by a new digital identity partnership, a super easy in-message wallet app, Telegram ad platform integration, and the viral Notcoin game launch.

Tether Chief Executive Officer Paolo Ardoino announced the move at the Token2049 crypto conference in Dubai. “We can create the first real power app that can both serve as a communication system, but also as a bank account,” he said.

Telegram, which now has 900 million monthly users, is the third-largest messaging app after Meta's products and Chinese WeChat. Besides the core messaging use, the application's rich functionality such as easily programmable bots, news channels, etc., makes it a popular choice in different communities. What makes Telegram particularly interesting for global stablecoin is its dominant position in countries like India, Russia, Indonesia, Brazil, Egypt, and Turkey, where dollar-denominated stablecoins provide an escape from the volatility of the local currencies.

Tether's USDT has already established itself as the third world's crypto instrument of choice. Unlike USDC, which is popular on DeFi and in other crypto-native communities, USDT has a strong adoption in the real world.

But where will the move leave TRON? The blockchain currently boasts a market share of almost 50% of available USDT, but its survival is almost completely pegged to the stablecoin. A whopping 99% of all transactions through TRON are for USDT, with users drawn due to the low fees. The big question now is whether Tether could completely migrate away from TRON. The platform could not survive, surely, and worryingly for TRON, rumors have already started circulating.

In January, a United Nations report said USDT held on the Tron Blockchain had become a "preferred choice" for fraudsters and money laundering in East and Southeast Asia, plunging the partnership into controversy. More recently, Circle's USDC left the platform, citing security issues.

After Circle's departure, Tether issued a vague statement to Cointelegraph, “Tether tokens are issued on several blockchains, which are simply transport layers for such tokens. Tether retains the ability to freeze transactions on each directly supported transport layer to accomplish its compliance duties. Nevertheless, Tether actively monitors the safety of each one of the supported transport layers to ensure the highest standards for our community,” the firm said. This ambiguity has done nothing to quell whispers that Tether may follow suit.

TON was originally called Telegram Open Network, a blockchain platform created by Telegram in 2017. The SEC filed charges against Telegram in 2019 and, after a lengthy battle, won, forcing Telegram to halt operations and pay its investors back. The Telegram community stepped in, renaming the platform The Open Network (TON) and taking over its development. The result is an "independent" blockchain, a workaround solution after the SEC banned Telegram from operating its own. Telegram has since reembraced it.