Tether Walks Back Plan to Freeze USDT on Five Blockchains

Tether has changed course on its plan to freeze USDT smart contracts across five smaller blockchains, easing concerns among users still holding tokens there. The company announced Friday that it will no longer disable contracts on Omni Layer, Bitcoin Cash SLP, Kusama, EOS, and Algorand. Instead, USDT on these networks will remain transferable, even though Tether has stopped issuing or redeeming tokens directly on them.

The decision came after pushback from community members who worried that freezing would effectively trap their holdings. By keeping the contracts alive, Tether gives users more time and flexibility, though it stresses that these tokens will be considered “unsupported” compared to USDT on major chains. The original freeze was scheduled to take effect September 1.

This adjustment fits into Tether’s broader strategy: narrowing its focus to ecosystems with strong developer activity, scalability, and real user demand. For now, that mainly means Ethereum and Tron, which dominate USDT circulation with $72.4 billion and $80.9 billion on their respective chains. BNB Chain is a distant third with $6.78 billion. Other fast-growing networks like Solana and Ethereum’s layer-2s (Arbitrum and Base) see heavy stablecoin use as well, but much of that activity revolves around Circle’s USDC rather than Tether’s stablecoin.

The chains losing support are comparatively small players. Omni Layer, once Tether’s original home, still has $82.9 million in USDT circulation, making it the most affected by the decision. EOS follows with $4.2 million, while Algorand, Kusama, and Bitcoin Cash SLP each hold less than $1 million. Tether had already been winding down on these networks: last year it stopped issuing on Omni, Kusama, and Bitcoin Cash SLP, and in June 2024 it halted minting on EOS and Algorand.

Despite these cutbacks, the stablecoin market is only gaining strength. The sector’s total market cap sits at $285.9 billion, led by USDT at $167.4 billion and USDC at $71.5 billion. Analysts expect that number to balloon in the years ahead. The U.S. Treasury forecasts stablecoins could swell to a $2 trillion market by 2028, especially after President Donald Trump signed the GENIUS Act last month. The law is designed to cement the U.S. dollar’s dominance by promoting dollar-pegged stablecoins and reinforcing its role as the world’s reserve currency.