Tether has adjusted its strategy regarding the use of its USDT stablecoin across several blockchain networks. Initially, the company planned to halt USDT functionality on five specific blockchains, but it has now decided to allow transfers to continue. However, Tether will no longer be involved in creating new USDT or redeeming existing tokens on these platforms. This shift impacts Omni Layer, Bitcoin Cash utilizing the SLP protocol, Kusama, EOS, and Algorand. This modification comes after Tether received input from users and developers within these blockchain communities. The original plan to discontinue operations was scheduled for September 1st. [1]
While USDT will remain transferable between different wallets on the mentioned blockchains, it will no longer receive the same level of official support as other Tether tokens. Users can still move their existing tokens, but generating new USDT or exchanging existing tokens for other assets via Tether on these chains will no longer be possible. [2] Tether explained that this strategic decision aligns with their broader goal of prioritizing blockchains demonstrating robust developer activity, excellent scalability, and significant user engagement. The company is now focusing on prominent networks such as Ethereum and Tron, which currently support the largest volume of USDT in circulation. [1]
According to data compiled by DeFiLlama, Tron hosts approximately $80.9 billion worth of USDT, while Ethereum holds around $72.4 billion. These are the top two blockchains for USDT adoption. BNB Chain ranks third, with $6.78 billion. Solana, alongside Ethereum’s layer-2 networks, Arbitrum and Base, also exhibit notable stablecoin usage, though these platforms predominantly utilize USDC rather than USDT. [1]
The impact of Tether’s decision varies among the affected blockchain networks. The Omni Layer seems to be the most significantly impacted, as it has $82.9 million in USDT in circulation. The other networks, including EOS, Bitcoin Cash SLP, Algorand, and Kusama, possess considerably smaller USDT balances, each holding less than $1 million. [1] Tether had previously communicated intentions to gradually discontinue USDT support on these chains throughout 2023 and 2024. This recent adjustment constitutes the concluding step in that process.
Tether’s revised approach mirrors a wider trend in the cryptocurrency sector toward consolidation and optimization, especially within the stablecoin and decentralized finance (DeFi) domains. By prioritizing major blockchain ecosystems, Tether aims to streamline its operations and ensure USDT’s continued importance as a key component for liquidity and integration with the growing DeFi applications. The company is also looking at new areas for USDT, such as its deployment on Bitcoin through the RGB protocol, which would further extend its influence in the crypto world. [3]
The overall stablecoin market continues to expand, with a total market capitalization of $285.9 billion as of recent data. USDT and USDC are the leading stablecoins, with market caps of $167.4 billion and $71.5 billion, respectively. Recent regulatory actions, like the signing of the GENIUS Act in the United States, are anticipated to strengthen stablecoins in international finance, supporting the role of the U.S. dollar. [1]
Source: [1] Tether scraps plan to freeze USDT on five blockchains (https://cointelegraph.com/news/tether-drops-plan-to-end-usdt-on-five-chains) [2] Tether Reverses Freeze Plan, Keeps USDT Transferable … (https://www.livebitcoinnews.com/tether-reverses-freeze-plan-keeps-usdt-transferable-on-five-blockchains/) [3] Tether Reclassifies USDT on Older Networks as “Unsupported” (https://finance.yahoo.com/news/tether-reclassifies-usdt-older-networks-011507793.html)