Bitcoin News Today: Tether Shifts Focus: Abandons Smaller Chains for Big Blockchain Hubs

Tether has reversed its decision to freeze USDT on five blockchains, allowing the stablecoin to remain transferable, although the company will no longer issue or redeem tokens on these networks. The affected blockchains include Omni Layer, Bitcoin Cash SLP, Kusama, EOS, and Algorand. This change follows community feedback from users and developers on these platforms, prompting Tether to revise its initial plan, which had been set for implementation on Sept. 1 [1].

Under the new approach, USDT will continue to be transferable between wallets on these blockchains but will no longer be officially supported as other Tether tokens. This means users can move their tokens but will no longer be able to mint new USDT or redeem existing tokens on these chains [2]. Tether emphasized that the decision aligns with its broader strategy of focusing on blockchains with strong developer activity, scalability, and user demand. The company is concentrating its efforts on major networks such as Ethereum and Tron, which currently host the largest supply of USDT [1].

Data from DeFiLlama shows that USDT has $80.9 billion on Tron and $72.4 billion on Ethereum, making them the top two chains for the stablecoin. BNB Chain holds $6.78 billion, rounding out the top three. Meanwhile, Solana, along with Ethereum’s layer-2 chains Arbitrum and Base, also show strong stablecoin activity, though these primarily use USDC rather than USDT [1].

The impact of the decision varies across the affected chains. The Omni Layer appears to be the most affected, holding $82.9 million in USDT circulation, while other networks such as EOS, Bitcoin Cash SLP, Algorand, and Kusama have significantly lower balances—under $1 million in each case [1]. Tether had previously announced plans to phase out USDT on these chains in 2023 and 2024, and this move represents the final step in that process.

Tether’s revised strategy reflects a broader industry trend toward consolidation and optimization within the stablecoin and DeFi space. By focusing on major blockchain ecosystems, Tether aims to streamline operations and ensure that USDT remains a key tool for liquidity and integration in growing DeFi applications. The company is also exploring new frontiers, such as deploying USDT on Bitcoin via the RGB protocol, further expanding its footprint in the crypto ecosystem [3].

The stablecoin market as a whole continues to grow, with a total market cap of $285.9 billion as of the latest data, led by USDT and USDC at $167.4 billion and $71.5 billion, respectively. Recent regulatory developments, such as the signing of the GENIUS Act by U.S. President Donald Trump, are expected to further strengthen the role of stablecoins in global financial systems by reinforcing U.S. dollar dominance [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)