USDT0 Launches on Arbitrum With 1:1 Backing, Faster Transfers

Tether has upgraded its USDT stablecoin on Arbitrum to USDT0, a cross-chain compatible asset backed 1:1 by Ethereum-based USDT reserves.

Tether Transitions Arbitrum USDT to USDT0

Tether says the upgrade automatically converts existing Arbitrum USDT holdings to USDT0 without requiring user action. USDT0 will serve as Arbitrum’s canonical stablecoin, maintaining the same contract address. Transfers between Arbitrum and Ethereum will settle within seven days during the migration period, which begins February 4 at 16:00 CET. Third-party bridges, including Stargate, remain unaffected.

Bitcoin.com News reported on Tether unveiling USDT0 in mid-January. Starting Feb. 5, Tether claims that USDT0 transfers via Arbitrum’s official bridge will settle in minutes with sub-cent fees. The legacy Arbitrum USDT bridge will be discontinued post-migration. USDT0 will also enable interoperability with chains like Ink and Berachain, with Megaeth integration planned.

Security audits were conducted by Openzeppelin, Guardian Audits, and Chainsecurity, with deployment verification completed. Chaos Labs will release a public risk audit report post-upgrade. Tether collaborated with Offchain Labs and Layerzero Labs to facilitate contract ownership transfers and infrastructure updates.

Arbitrum’s decentralized finance (defi) protocols, including Aave and GMX, will automatically support USDT0. Tether’s transparency page reported $139.46 billion in USDT net circulation as of Jan. 29, 2025.

The upgrade aims to expand Tether’s Layer two (L2) presence, leveraging Arbitrum’s low fees and fast transactions. Over 1.3 billion USDT is already on the network, with further growth anticipated.

USDT0 is now live on Arbitrum and Ink, with additional chains joining later this year. Users can transfer USDT to Arbitrum via usdt0.to post-upgrade.