Ethereum News Today: Tether Shifts Strategy Amid Pressure, Keeps USDT Alive on Five Chains

Tether, the issuer of the largest stablecoin by market capitalization, has announced that it will halt its prior plans to freeze USDT smart contracts on five blockchains. The affected networks include Omni Layer, Bitcoin Cash SLP, Kusama, EOS, and Algorand. Tether stated that while users will continue to transfer USDT tokens on these chains, the stablecoin will no longer be issued or redeemed, effectively discontinuing official support for these blockchains [1]. The decision follows community feedback from participants on these networks, leading Tether to revise its strategy and abandon the initial plan to terminate support by September 1, 2025 [3].

Omni Layer is expected to be the most impacted, with $82.9 million in circulating USDT, while other chains such as EOS hold $4.2 million and the remaining networks hold under $1 million [1]. Tether has been gradually phasing out support for these chains over the past two years, beginning with the August 2023 announcement to stop issuing USDT on Omni, Kusama, and Bitcoin Cash SLP. In June 2024, the company halted minting on EOS and Algorand [1]. Despite the withdrawal of new issuance and redemption services, existing token transfers remain functional, allowing users to retain some level of utility on these networks [2].

Tether’s revised approach reflects its broader strategic focus on supporting blockchains with high user adoption, strong developer activity, and scalability. The company has concentrated its efforts on Ethereum and Tron, which remain the two largest ecosystems for USDT. According to DeFiLlama, Tron and Ethereum host $80.9 billion and $72.4 billion of USDT supply, respectively [1]. BNB Chain ranks third with $6.78 billion in USDT. Meanwhile, Solana and Ethereum’s layer-2 networks—Arbitrum and Base—are gaining traction, though they are more associated with Circle’s USDC stablecoin [3].

The global stablecoin market continues to expand, currently valued at $285.9 billion, with USDT and USDC leading at $167.4 billion and $71.5 billion, respectively [1]. Analysts project significant growth in the sector, particularly as U.S. policy increasingly supports dollar-pegged stablecoins. The recent passage of the GENIUS Act, signed into law by President Donald Trump, aims to strengthen the dominance of the U.S. dollar by promoting stablecoins tied to it in global markets. The U.S. Treasury Department anticipates the stablecoin market reaching $2 trillion by 2028 [2].

Tether’s decision aligns with a broader shift in the crypto industry toward regulatory clarity and market consolidation. As stablecoins become more integrated into global financial systems, companies like Tether are recalibrating their operations to align with evolving regulatory expectations and market demand. The move to pause the USDT freeze on the five blockchains underscores a pragmatic approach to balancing innovation with operational sustainability, particularly in an environment where user feedback and ecosystem dynamics play a growing role in shaping industry practices [3].

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 Scraps USDT Freeze Plan on Five Chains, Ends Issuance and Redemption (https://cryptorank.io/news/feed/44129-tether-scraps-usdt-freeze-plan-on-five-chains-ends-issuance-and-redemption)

[3] Tether pauses USDT freeze across five blockchains (https://www.mitrade.com/insights/news/live-news/article-3-1082275-20250830)