Tether Halts USDT Issuance on 3 Blockchains
Late on August 17, Tether announced it would cease supporting USDT on Kusama, Omni, and Bitcoin Cash due to declining user demand.
According to updates released on August 17, Tether, the company behind the leading stablecoin USDT, will stop issuing USDT on three blockchains: Omni, Bitcoin Cash, and Kusama, citing decreased demand from users.
Tether makes strategic decision, to meet community demands. After careful consideration, Tether will discontinue support for the ⛓️Kusama, Bitcoin Cash SLP and Omni Layer (redemptions and chain-swaps will proceed as normal).
— Tether (@Tether_to) August 17, 2023
Details : https://t.co/A9hB53bQKK pic.twitter.com/LMEYv4z4lV
Notably, Omni, built on the Bitcoin protocol, was the first blockchain supported by Tether when USDT launched in 2014.
Users will have 12 months to convert USDT on Omni, Bitcoin Cash, and Kusama into cash or swap them for USDT versions supported on 13 other blockchains: Ethereum, TRON, Solana, Avalanche, Tezos, Kava, EOS, Algorand, Liquid, Polkadot, Near, and Polygon.
According to data from Tether's website, out of the total 83 billion USDT in circulation, the amounts on Omni, Bitcoin Cash (SLP), and Kusama are $239 million, $987,000, and $1.49 million, respectively.
View more: What is USDT?
These amounts are significantly lower compared to other blockchains, led by TRON ($43 billion USDT) and Ethereum ($38.5 billion).
The decision to discontinue issuance and reclaim stablecoins is due to the lack of necessary crypto activity to sustain the platforms long-term, particularly in the case of Omni, despite its substantial USDT volume.
In contrast, showing continued faith in Bitcoin, Tether is actively developing RGB—a smart contract system capable of operating on Bitcoin's Layer-2 or Layer-3. Upon RGB's deployment, Tether promises to reintroduce USDT on a Bitcoin-based blockchain.
In its Q2 2023 report, Tether disclosed earning over $1 billion by holding a large amount of assets backing USDT in the form of U.S. Treasury bills, valued at over $72.5 billion. This surplus profit has pushed the company's earnings well beyond the $3 billion mark. Market capitalization for USDT also reached a new record during this period, surpassing $83.4 billion, despite the challenging crypto market conditions.
According to CoinMarketCap data, USDT's price has yet to recover to $1 since experiencing a significant drop on DEX platforms Curve and Uniswap in early August 2023. This marks the deepest depeg of USDT since the FTX crash in November 2022.
Price fluctuation of USDT over the past month, screenshot from CoinMarketCap at 08:50 PM on August 17, 2023.
