The GENIUS Act could enhance U.S.-based stablecoin projects in future years.
Tether, the leading stablecoin issuer, announced that it has decided to abandon its plan to freeze USDT smart contracts on five blockchain networks. The company highlighted that token transfers on these networks will remain feasible, but no new USDT tokens will be minted. This decision signifies a strategic shift for Tether as it reassesses its focus and commitment to different blockchain platforms.
ContentsPlans ReassessedUSDT Dominance on Tron and EthereumThe Growing Stablecoin Market Plans Reassessed
Tether’s revised strategy impacts users on the Omni Layer, Bitcoin $108,248 Cash SLP, Kusama, EOS, and Algorand networks. The company explained that after taking feedback from various communities, it opted to terminate direct token issuance and redemption instead of implementing a total freeze on smart contracts. Despite ongoing transfer functionality, these networks will not see any new token creations, meaning they will no longer receive official support on par with other Tether tokens.
This revision aligns with Tether’s long-term strategy, which prioritizes supporting blockchains that exhibit strong developer activity, scalability, and user demand. Although Tether is not entirely withdrawing from these chains, its active support will be limited. Notably, Tether maintains robust engagement with networks like Tron and Ethereum $4,394, which boast widespread user adoption and practical use cases.
USDT Dominance on Tron and Ethereum
According to DeFiLlama data, the Tron network hosts $80.9 billion worth of USDT in circulation, with Ethereum following at $72.4 billion. BNB Chain comes third, with $6.78 billion. Networks like Solana $206, Ethereum Layer-2 chains such as Arbitrum, and Base also show significant stablecoin activity, although Circle’s USDC stablecoin tends to be preferred in these environments.
The Omni Layer, with $82.9 million in USDT circulation, is expected to be the most affected by Tether’s new stance among the discontinued chains. Other networks such as EOS, Bitcoin Cash SLP, Algorand, and Kusama have less than $1 million each in USDT holdings.
The Growing Stablecoin Market
As per CoinGecko statistics, the total market capitalization of the stablecoin sector is now $285.9 billion, with USDT accounting for $167.4 billion and USDC for $71.5 billion. Recently, former U.S. President Donald Trump signed the GENIUS Act, encouraging dollar-pegged stablecoins. Analysts suggest this legislation will bolster the dollar’s position as the global reserve currency, enhancing its dominance over others.
While withdrawing support from less-utilized chains like the Omni Layer could drive efficiency by steering stablecoin systems to more effective networks, some users might view the neglect of minor chains as a setback for decentralization. The GENIUS Act is anticipated to significantly empower U.S.-based stablecoin initiatives and dollar-pegged assets in the coming years, making Tether’s alignment with this trend a logical course of action.
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