Stablecoin giant Tether has decided against freezing its USDT smart contracts on five blockchains, including Omni Layer, Bitcoin Cash SLP, Kusama, EOS, and Algorand. This reversal comes after the company received significant feedback from the affected ecosystems. While USDT will remain transferable on these networks, Tether will cease direct issuance and redemption, effectively discontinuing official support.
Key Takeaways
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Tether will not freeze USDT smart contracts on Omni Layer, Bitcoin Cash SLP, Kusama, EOS, and Algorand.
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USDT will remain transferable on these chains, but direct issuance and redemption will cease.
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The decision was made after considering community feedback from these ecosystems.
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Tether is focusing its support on blockchains with strong developer activity, scalability, and user demand.
Shifting Focus to Thriving Ecosystems
Tether's revised strategy reflects a broader commitment to concentrating resources on blockchain ecosystems that demonstrate robust developer activity, scalability, and substantial user demand. Currently, Tron and Ethereum are the primary networks for USDT, with $80.9 billion and $72.4 billion in circulating supply, respectively. BNB Chain follows as the third-largest, with $6.78 billion.
Other active ecosystems like Solana, Arbitrum, and Base also see significant stablecoin activity, though they tend to favor Circle's USDC. This strategic pivot aims to optimize Tether's support for networks that offer the most utility and adoption.
Impact on Affected Blockchains
An analysis of USDT balances indicates that Omni Layer will be the most affected by Tether's decision, holding approximately $82.9 million in USDT circulation. EOS has $4.2 million, while Bitcoin Cash SLP, Algorand, and Kusama each have less than $1 million in USDT.
Tether's process of phasing out support for these older chains has been ongoing for two years. Previously, the company announced the discontinuation of USDT issuance on Omni Layer, Kusama, and Bitcoin Cash SLP in August 2023, followed by a halt in minting on EOS and Algorand in June 2024.
Stablecoin Market Outlook
The global stablecoin market currently boasts a total market capitalization of $285.9 billion, with USDT and USDC leading the pack. Recent developments, such as the signing of the GENIUS Act, are expected to further bolster the dominance of US dollar-pegged stablecoins. The US Department of the Treasury anticipates the stablecoin market to expand significantly, potentially reaching $2 trillion by 2028.
Sources
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Tether Abandons Plan To Freeze USDT On Five Chains, Cointelegraph.
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