Tether Revises USDT Phase-Out: No Freezing, Just No More Issuance 🔄💵

[kevin1]

Stablecoin giant Tether has adjusted its plan to sunset USDT support on five blockchains, saying it will no longer freeze contracts, but will stop minting and redemption on these networks.

What Changed

Original plan: fully end support (including freezing contracts) on Omni Layer, Bitcoin Cash SLP, Kusama, EOS, Algorand starting Sept. 1.

New plan (after community pushback):

Smart contracts remain active → tokens still transferable.

No new issuance or redemption → tokens on these chains become “unsupported.”

Tether: “Following feedback from the communities of these discontinued blockchains, Tether has revised this approach and will not freeze the smart contracts.”

Why It Matters

This reflects Tether’s selective focus:

Strong ecosystems with developer activity + scalability = continued support (e.g., Ethereum, Tron, BNB Chain).

Niche or declining L1s = phased out.

USDT supply by chain (DeFiLlama):

Tron: $80.9B

Ethereum: $72.4B

BNB Chain: $6.78B

Omni Layer: $82.9M

EOS: $4.2M

Others (Algorand, Kusama, BCH SLP): < $1M each

Omni Layer, once the birthplace of USDT, is the most affected — but its circulation is now a fraction of Tron/Ethereum dominance.

Stablecoins in the Big Picture

USDT market cap: $167.4B

USDC market cap: $71.5B

Global stablecoin market: $285.9B (CoinGecko)

U.S. Treasury projects the sector could hit $2T by 2028, especially with regulatory tailwinds.

Notably, the GENIUS Act (signed July 2025) is designed to promote dollar-pegged stablecoins, strengthening USD dominance in digital markets.

🧩 The Takeaway

Tether isn’t abandoning legacy chains outright — but it’s signaling a clear priority:

Focus on networks with liquidity, adoption, and compliance runway.

Allow unsupported chains to fade without breaking existing users.

Do you think leaving “unsupported” tokens circulating (but not redeemable) creates long-term risks for users, or is it the right compromise to maintain trust in Tether’s brand?

[Nahid10]

I think this was the only sensible compromise. Freezing contracts would have felt like a rug for anyone still holding on Omni or EOS. At least now, tokens still move peer-to-peer even if they’re no longer redeemable. Tether is clearly signaling “major chains only,” but leaving old tokens alive preserves user trust. For a $167B asset, optics matter.

[jacson4]

Unsupported tokens floating around forever could create confusion or even scams. New users might not realize those versions can’t be redeemed, leading to liquidity traps. Tether should push much stronger messaging and maybe incentives to migrate. Otherwise, people are going to get burned trying to use “zombie USDT” in smaller ecosystems.

[emranrx]

Wild to think Omni was the birthplace of Tether, and now it’s basically irrelevant compared to Tron and ETH. This really shows how much the stablecoin game has consolidated. Over $150B of USDT sits on just two chains now. It’s not about tech nostalgia — Tether only cares about scale, liquidity, and compliance runway. Evolution in real time.

[kelson10]

On one hand, this reduces fragmentation and strengthens USDT’s position on dominant L1s. On the other, it shows how centralized stablecoins really are: Tether can effectively decide which chains live or die. With the GENIUS Act backing dollar stablecoins, we may be entering a phase where regulation + issuer preference shapes the multi-trillion dollar stablecoin market more than user choice.