Tether, the stablecoin issuer, has decided not to freeze USDT smart contracts on five chains, stating that the tokens will remain transferable but will no longer be issued or redeemed.
This updated plan affects users on Omni Layer, Bitcoin Cash SLP, Kusama, EOS, and Algorand, as Tether announced on Friday after considering feedback from these ecosystems. “In light of community feedback from these discontinued blockchains, Tether has updated its approach and will not be freezing the smart contracts on these networks.”
Though users will still be able to transfer tokens on these blockchains, Tether is ceasing direct issuance and redemption on them. “This indicates that the tokens will no longer receive official support like other Tether tokens.” The original plan was to stop support on Sept. 1.
This decision is part of Tether’s broader strategy to focus on expanding support for crypto ecosystems that exhibit strong developer activity, scalability, and user demand — without completely abandoning long-supported chains. Only a limited number of smart contract-based layer-1 blockchains have achieved significant user adoption and practical use cases, notably Tron and Ethereum, which receive the most backing from Tether.
Tron and Ethereum lead USDT adoption
Currently, Tron and Ethereum boast $80.9 billion and $72.4 billion worth of USDT in circulation on their respective chains, with BNB Chain following at $6.78 billion, according to data from DeFiLlama shows.
Other thriving crypto ecosystems with notable stablecoin activity include Solana and Ethereum layer-2 chains Arbitrum and Base, though they primarily utilize Circle’s USDC stablecoin instead of USDT.
Omni Layer to be most affected
An analysis of USDT balances across the impacted blockchains indicates that Omni Layer will be most significantly affected, holding a net circulation of $82.9 million USDT, while EOS has $4.2 million and Bitcoin Cash SLP, Algorand, and Kusama each possess under $1 million worth of USDT.
Tether’s phase-out of support for these blockchains has been in planning for two years. In August 2023, the company announced it would cease issuing USDT on Omni Layer, Kusama, and Bitcoin Cash SLP. By June 2024, Tether had halted minting on EOS and Algorand.
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As of now, the total market cap of stablecoins stands at $285.9 billion, with USDT and USDC leading at $167.4 billion and $71.5 billion, respectively, as reported by CoinGecko data.
Stablecoin market set to strengthen in years to come
Recently, US President Donald Trump signed the GENIUS Act into law, which many analysts predict will enhance the dominance of the US dollar by promoting stablecoins linked to the dollar, competing with other currencies, and solidifying the dollar’s position as the leading reserve currency worldwide.
The US Department of the Treasury anticipates that the stablecoin market will reach $2 trillion by 2028.
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