Wormhole recently announced support for cross-chain transfer mechanisms for the native version of USDT.

According to the announcement, the native version of USDT will be supported for transfers between Ethereum and popular EVM networks. This solution, supported by Wormhole, will be implemented in collaboration with two DEX platforms: PancakeSwap and Uniswap V3.

Previously, Wormhole users had to use the Wrapped Token version (a representative wrapped version), which caused significant inconvenience and confusion during asset transfers. With the latest solution, an intermediate version, xUSDT (Wormhole USDT), will act as a bridge. Additionally, xUSDT/USDT liquidity pools at each bridge endpoint will be supported through a centralized liquidity model.

This approach will minimize exchange rate fluctuations due to dispersed liquidity, while users will still be able to use the native version of USDT on the destination chain they wish to transfer tokens to.

The fee proposed by Wormhole for transferring USDT across chains will range from 0.02% to 0.04%. Additionally, this feature has been added to the Wormhole Connect toolkit to facilitate easier integration for developers.

It is evident that this collaboration between Tether and Wormhole will help the stablecoin issuer reduce the resources needed to build a native token transfer protocol like CCTP. However, this approach also involves some trade-offs, specifically in the proactive integration of features.

At the time of writing, Tether remains the largest stablecoin by market capitalization, with a value of around $112 billion.