Stablecoin issuer Tether has deserted its plan to freeze USDT good contracts on 5 chains, saying the tokens will stay transferable however not be issued or redeemed.
The revised plan impacts customers on Omni Layer, Bitcoin Money SLP, Kusama, EOS, and Algorand, Tether mentioned on Friday after receiving suggestions from members of those ecosystems. “Following the suggestions from the communities of those discontinued blockchains, Tether has revised this method and won’t freeze the good contracts on these networks.”
Whereas customers will nonetheless be capable to switch tokens on these blockchains, Tether is discontinuing direct issuance and redemption on these chains. “This implies the tokens will not be formally supported as different Tether tokens.” The preliminary plan was to finish help on Sept. 1.
The choice aligns with Tether’s broader technique to stay centered on increasing help for crypto ecosystems with sturdy developer exercise, scalability, and consumer demand — with out fully abandoning chains it has lengthy supported. Solely a small variety of good contract-based layer-1 blockchains have succeeded at reaching large-scale consumer adoption and providing sensible use circumstances, together with Tron and Ethereum — the 2 chains Tether supplies essentially the most help for.
Tron and Ethereum lead USDT adoption
Tron and Ethereum have $80.9 billion and $72.4 billion value of USDT provide circulating on their respective chains, whereas BNB Chain rounds out the highest three at $6.78 billion, DeFiLlama knowledge reveals.
Solana, together with Ethereum layer-2 chains Arbitrum and Base, are among the many different thriving crypto ecosystems with heavy stablecoin exercise, although they primarily use Circle’s USDC stablecoin reasonably than USDT.
Omni Layer to be most affected
A assessment of USDT balances throughout the affected blockchains reveals that Omni Layer will likely be most impacted because it holds a internet circulation of $82.9 million USDT, whereas different networks have a smaller participation: EOS has $4.2 million, whereas Bitcoin Money SLP, Algorand, and Kusama all have below $1 million value of USDT.
Tether’s sunsetting of help for these blockchains has been within the works for 2 years. In August 2023, the corporate introduced it will not be issuing USDT on Omni Layer, Kusama, and Bitcoin Money SLP. In June 2024, Tether halted minting on EOS and Algorand.
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The entire market cap of stablecoins presently sits at $285.9 billion, led by USDT and USDC at $167.4 billion and $71.5 billion, respectively, CoinGecko knowledge reveals.
Stablecoin market set to strengthen in years to come back
Final month, US President Donald Trump signed the GENIUS Act into legislation, which many analysts say will increase US greenback dominance by selling stablecoins pegged to the greenback, rivaling different currencies, and reinforcing the greenback’s position because the world’s main reserve foreign money.
The US Division of the Treasury expects the stablecoin market to develop to $2 trillion by 2028.
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