In a significant development in the cryptocurrency space, Tether, the well-known stablecoin provider, has decided to pull the plug on USDT support for three blockchains. The blockchains affected by this decision include Bitcoin’s Omni Layer, Bitcoin Cash’s Simple Ledger Protocol (SLP), and Kusama. This move comes as a result of these platforms’ lack of substantial uptake, as stated by Tether. The keyphrase to note here is Tether discontinues USDT support for three blockchains.
What Led to Tether’s Decision?
According to Tether’s official statement, the level of community interest plays a vital role in determining whether to extend USDT support to a specific network. The company noted that maintaining support for a blockchain that fails to gain significant traction over a prolonged period can compromise security and oversight, rendering the process inefficient. Unfortunately, this seems to be the situation with Omni, a smart contract layer built on top of Bitcoin about a decade ago to enable smart contracts and tokenization.
Back in 2014, Omni served as the first transport layer for Tether, playing a crucial role in the company’s early stages. However, over time, Omni struggled to gain popularity due to the lack of popular tokens and the presence of USD₮ on other blockchains. Crypto exchanges have shown a preference for other layers like Ethereum and Tron, further reducing the popularity of USDT transfers on Omni.
What’s Next for Tether?
Despite the setback with Omni, Tether has not abandoned Bitcoin. The company plans to issue USDT on RGB, an alternate smart contracts system that leverages Bitcoin’s base layer and lightning network for unparalleled scalability. Tether firmly believes that RGB will herald a new era for digital assets, smart contracts, and digital rights, gaining extensive support from major industry players.
While Tether has ceased minting USDT on the affected chains, holders of USDT on these platforms can still redeem their tokens for the next 12 months. They can also trade their tokens on exchanges, like Bitfinex, for assets on other chains.
Impact on the Crypto Landscape
Although Omni’s failure to achieve widespread adoption is a setback, several other Bitcoin-based stablecoin initiatives have been launched in recent years. For instance, in May, Stably launched the first stablecoin on Bitcoin’s base layer using the BRC-20 token standard, developed using Ordinals technology.
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It’s crucial to note that while Tether’s decision to discontinue USDT support for the three blockchains may seem abrupt, it’s part of the evolving nature of the cryptocurrency landscape. As the industry continues to grow and mature, we can expect more such strategic shifts to occur.
