Stablecoin Issuer Tether has abandoned plans to freeze USDT smart contracts in five chains. It states that the token remains transferable but will no longer be issued or redeemed.
The revised plan will affect the impact of the Omni tier, Bitcoin Cash SLP, Kusama, EOS, and Algorand. “Following feedback from these discontinued blockchain communities, Tether has revised this approach and does not freeze smart contracts in these networks.”
Users can transfer tokens to these blockchains, but Tethers have stopped directly issuing and redemption of these chains. “This means that tokens will no longer be officially supported as other tether tokens.” The initial plan was to end support on September 1st.
This decision is in line with Tether’s broader strategy to continue to focus on expanding support for crypto ecosystems with strong developer activity, scalability, and user demand. Only a small number of smart contract-based layer 1 blockchains have achieved large user adoption and have successfully provided practical use cases, including Tron and Ethereum.
Tron and Ethereum are leading the adoption of USDT
Tron and Ethereum have USDT supplies worth $80.9 billion and $72.4 billion in their respective chains, while the BNB chain closes the top three at $6.788 billion.
Solana, along with the Ethereum Layer-2 Chains Arbitrum and Base, mainly uses Sircle’s USDC Stablecoin instead of USDT, but is one of the heavily stable cryptographic ecosystems.
Most affected Omni layers
A review of the USDT balance across the affected blockchain shows that the OMNI layer is most affected as it holds net distribution of $82.9 million, but there are few participation in other networks.
The tethered sundown of support for these blockchains has been in work for two years. In August 2023, the company announced that it would no longer issue USDTs on Omni Layer, Kusama and Bitcoin Cash SLPs. In June 2024, Tether stopped EOS and Algorand mint.
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Stablecoins’ total market capitalization is currently at $285.9 billion, with $167.4 billion and $71.5 billion, led by USDT and USDC, respectively, Coingecko data shows.
The Stablecoin market is expected to be strengthened in the coming years
Last month, US President Donald Trump signed the Genius Act. Many analysts say it will boost the US dollar’s dominance by promoting stablecoins fixed in the dollar, comparable to other currencies and strengthening the dollar’s role as the world’s leading reserve currency.
The US Treasury expects the Stablecoin market to grow to $2 trillion by 2028.
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