Tether Revises Legacy USDT Exit Plan, Keeps Tokens Transferable But Unsupported

Tether has revised its plan for legacy USDT tokens, confirming they will remain transferable but unsupported on Omni, EOS, Algorand, Kusama, and SLP blockchains. Issuance and redemption will stop, but tokens can still be transferred. Tron and Ethereum lead USDT supply with over $150B, while Bitcoin is set to join via RGB protocol.

Tether has announced a significant change in its support policy for legacy USDT tokens, confirming that they will remain transferable but unsupported on Omni, EOS, Algorand, Kusama, and SLP blockchains. This means that while users can still send and receive existing USDT balances on these chains, Tether will no longer issue or redeem new tokens there. The company made this decision after receiving feedback from affected community ecosystems.

The decision to discontinue issuance and redemption on these chains is part of Tether's strategic focus on chains with stronger developer activity and user demand. Tron and Ethereum remain the primary ecosystems for USDT, with the largest circulating supplies. According to data from DeFiLlama and CoinGecko, Omni holds approximately $82.9 million in USDT, EOS has about $4.2 million, while the other affected chains have under $1 million each. The discontinuation of official support may limit liquidity and integrations over time, but users can still use these tokens for transfers.

Tether's sunsetting of support for these chains has been in progress for two years. The company initially planned to halt USDT issuance on Omni Layer, Kusama, and Bitcoin Cash SLP in August 2023. Minting on EOS and Algorand was halted in June 2024. The recent revision cancels plans to freeze smart contracts but maintains discontinued issuance/redemption.

The change in Tether's policy comes as Tron has also made strategic moves to maintain its dominance in stablecoin payments. The Super Representative community of Tron voted to slash network fees by 60%, reducing energy unit prices from 210 sun to 100 sun. This fee reduction aims to counter rising transaction costs and expand the network's user base. Tron's aggressive fee reduction strategy is part of a broader effort to maintain its position as a low-cost payment rail, particularly in regions where cost savings are a priority.

Tether's focus on high-adoption chains like Tron and Ethereum, while maintaining limited support for less active networks, is a strategic move to align with market demands and developer activity. The decision to discontinue official support for legacy blockchains is a reflection of this strategic shift.

In conclusion, Tether's revised policy means that USDT support is evolving. While transfers will continue on the five affected chains, direct issuance and redemption by Tether are discontinued. Users should monitor liquidity and third-party integrations as official support recedes. For account-level concerns, users are advised to consult their wallet or exchange provider.

References:
[1] https://en.coinotag.com/tether-may-keep-usdt-transferable-on-omni-eos-algorand-kusama-and-bitcoin-cash-while-halting-issuance/
[2] https://cryptonews.com/news/tron-votes-to-slash-network-fees-60-to-defend-stablecoin-dominance/