According to CryptoPotato, Tether (USDT) recorded a weekly transaction volume of $110 billion on Tron in the first week of April, indicating an increase in stablecoin activity on the network. The latest milestone for Tether on Tron was twice the amount the stablecoin settled on Ethereum, suggesting that Tron continues to be the preferred network for USDT transactions. The high volume of USDT transactions on Tron is attributed to the network's low fees, which have facilitated easy access to the United States dollar-backed asset.
In the previous month, it was reported that the USDT transaction volume on Tron was reaching peak levels seen in January 2023. The stablecoin was averaging about two million transactions daily on the network, a surge that started in February. Tether's market cap recently reached $100 billion, reinforcing its dominance in the stablecoin market. Although the stablecoin is available on 15 different blockchains and protocols, a significant portion of its supply is on the Tron network. Earlier this year, Reflexivity Research found that approximately 94% of the stablecoin total value locked on Tron belongs to USDT. This dominance also extends to Tron smart contracts, where USDT accounts for more than 95%. The USDT contract consumes a large part of the on-chain energy, suggesting that the asset is primarily used for stablecoin transactions with limited diversification.
However, as USDT expands its presence on Tron, illicit activities on the network have also increased. A study by blockchain forensics firm TRM Labs revealed that Tron accounted for 45% of illegal transaction volume in 2023, surpassing Ethereum and Bitcoin, which were responsible for 24% and 18%, respectively. Tron has become the preferred network for cyber criminals, North Korean hackers, terrorist financiers, and drug sellers due to its low gas fees and minimal price fluctuations. These criminals often exchange their stolen and illicit crypto assets, mainly for USDT, on Tron before they are laundered for over-the-counter trades. The growing use of USDT for illicit activities has drawn the attention of several regulators. In January, a United Nations report identified the stablecoin as a tool for money laundering and scams in Southeast Asia. However, USDT issuer Tether has expressed disappointment at the UN’s claims, arguing that the report only focused on the asset’s alleged connection to illicit activities and not its positive impact.