Tether Modifies USDT Issuance Strategy on Select Blockchains

Tether's Strategic Shift

Tether, the notable issuer of the stablecoin USDT, has announced substantial changes to its issuance strategy across various blockchains. The company has discontinued support for USDT on Bitcoin, Kusama, and Bitcoin Cash. This decision arose from an extensive evaluation centered on security, customer service, regulatory compliance, and overall oversight.

Reasons Behind the Change

The primary factor for this shift was the insufficient traction on these blockchains. Tether explained that when a blockchain does not show a significant increase in usage over time, maintaining resources and oversight becomes challenging and may pose potential security risks. Consequently, the minting of USDT-Omni, USDT-Kusama, and USDT–BCHSLP ceased as of August 17.

Continuation of USDT Redemption

Despite the halted issuance, Tether has reassured its users that USDT redemption on these platforms will continue under standard procedures for the next 12 months. For users seeking alternatives, there is an option to swap impacted USDT to other versions through platforms like Bitfinex.

Future Prospects

Omni, the pioneering layer Tether utilized in 2014 for stablecoin issuance on Bitcoin, still holds potential. Although USDT's Omni-based usage has decreased due to availability on other blockchains, Tether may reconsider issuing USDT on Bitcoin if there is notable growth in Omni Layer's decentralized exchange (DEX) and token issuance protocol activities.

Furthermore, Tether is exploring collaborations with RGB, a smart contract system on Bitcoin’s layer-2 and 3. Once USDT's implementation on RGB becomes operational, Tether could potentially issue USDT on Bitcoin again.