Tether is shifting its strategy by allowing users to continue transferring USDT tokens on five chosen blockchains while stopping all issuance and redemptions, marking a significant change in its operational approach.
Changes to USDT Operations
- Tether has declared that while transfers of USDT on five blockchains remain viable, no new USDT will be issued or redeemed.
- The company is focusing on Ethereum, Tron, and other high-demand networks.
- The stablecoin market is projected to reach $2 trillion by 2028 amid increasing regulatory support in the United States.
Tether has adjusted its previous plan to halt USDT smart contracts on five blockchains. Instead, users can continue to transfer tokens while the issuance and redemption will cease.
This decision significantly impacts Omni Layer, Bitcoin Cash SLP, Kusama, EOS, and Algorand—networks that now account for only a fraction of USDT circulation.
Transition from Freezing to Gradual Wind Down
Initially, Tether announced in July 2024 that it would commence redemptions and freeze tokens across these five chains starting September 1, 2025. However, in a communication issued on August 29, the company appears to have reversed the freezing policy, opting instead for a cessation of issuance and redemption.
In response to feedback from communities associated with these blockchains, Tether revised its strategy. Although transfers are permissible, the company will no longer mint or exchange tokens on these networks, effectively leaving them unsupported.
This decision signifies the end for Omni Layer, which was once the foundation for USDT issuance and currently holds just under $83 million. EOS trails behind with a little over $4 million, while the remaining chains each have less than $1 million.
Conversely, Ethereum and Tron dominate the stablecoin landscape, with over $150 billion issued collectively.
Focus on High-demand Ecosystems
This strategic pivot highlights Tether’s intent to consolidate its efforts around networks with high liquidity and robust developer activity. Ethereum, Tron, and BNB Chain remain Tether’s priority, even as emerging platforms like Arbitrum, Base, and Solana gain traction, particularly in relation to rival USDC.
By reducing focus on legacy blockchains, Tether aims to streamline resources towards ecosystems that promise scalability, user demand, and integration within a broader digital finance landscape.
A New Political Era for Stablecoins
The recalibration by Tether underscores the balance between legacy commitments and future opportunities. Although tokens on Omni, EOS, and other abandoned chains remain transferable, Tether’s focus is firmly set on broader, more dynamic ecosystems.
Meanwhile, traditional financial players such as Western Union are exploring stablecoins to modernize remittance processes and enhance currency conversion, suggesting an impending wave of broader adoption.
Furthermore, Tether’s decision coincides with increasing political support for stablecoins in the United States. The recent GENIUS Act, signed by President Trump, offers regulatory backing for dollar-pegged assets as a means to expand the reach of the U.S. dollar in digital markets.
Additionally, the U.S. Treasury anticipates that the stablecoin sector could surpass $2 trillion by 2028, up from the current $285.9 billion. The CEO of Ripple has indicated that this growth could accelerate dramatically, potentially achieving this milestone within just a few years.
As stablecoins expand their roles in payments, savings, and global transfers, Tether’s transition reflects both market realities and the demands of a sector poised for multi-billion dollar growth.
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