Tether Updates Plan for USDT on Legacy Blockchain Networks

By: Isha Das

Tether, the prominent stablecoin issuer, has modified its strategy regarding the status of its USDT tokens on older blockchain platforms. Initially, Tether had planned to halt the activity of USDT on several legacy networks, including Omni Layer, Bitcoin Cash SLP, Kusama, EOS, and Algorand, by freezing the smart contracts and rendering the tokens non-transferable. This decision, announced in early June, sparked considerable feedback from the blockchain communities primarily concerned with the inability to cultivate or redeem their USDT tokens effectively.

Following a period of critical discussions and consideration, Tether has decided against the freezing of USDT on these older networks. Instead, they will classify these tokens as ‘unsupported’. While this strategy still indicates no further issuance or redemption on these platforms, it permits the ongoing transferability of already existing tokens. This tactical shift is perceived as an effort by Tether to phase out operations on blockchains that hold negligible volumes of stablecoin activities without fostering discontent among its user base. Moreover, this reclassification prevents any detrimental impacts that a hard freeze could have induced, maintaining some level of utility for token holders.

Simultaneously, Tether is directing its focus towards integrating USDT more thoroughly within the Bitcoin network through its RGB protocol, marking a significant pivot in strategy. The RGB protocol allows USDT to blend seamlessly with Bitcoin's security framework, departing from methods such as wrapped tokens which entail custodial bridge dependency. This move underlines Tether’s broader initiative to reinforce its prominent standing across major blockchain platforms with heightened liquidity and use cases, notably those such as Ethereum and Tron, which already boast substantial USDT circulation.