USDT Growth Outpaces Smart Contract Holdings

A recent Bank for International Settlements (BIS) working paper has shed new light on the growth of USDT, a popular stablecoin. According to the study, more USDT was issued without a corresponding increase in balances held by smart-contract accounts on Ethereum. In fact, the share of USDT held by these accounts on Ethereum dropped from around 20% in 2021 and 2022 to roughly 10-15% as issuance expanded through 2024.

The BIS authors note that a lower share can result when newly issued tokens accumulate outside contracts even if the amount in contracts stays near its earlier level. The study's Ethereum series reflects this distinction, showing far more USDT in non-contract accounts as issuance grew without a comparable sustained increase in smart-contract holdings.

The researchers reconstructed USDT holdings from Ethereum and Tron transfer event logs, identifying smart-contract accounts from contract deployments and classifying other addresses as externally owned accounts. They cross-checked token supply against mint, burn, and blacklist-destruction events to provide a more accurate picture of USDT balances.