Stablecoin giant Tether has recently announced that it will no longer support its USDT token on three blockchains due to a lack of significant traction. The affected blockchains are Bitcoin’s Omni Layer, Bitcoin Cash’s Simple Ledger Protocol (SLP), and Kusama.
According to Tether, community interest plays a crucial role in determining whether the company will bring USDT to a particular network. If a blockchain fails to gain traction over an extended period and shows no signs of recovery, maintaining support becomes inefficient and may compromise security and oversight.
One of the blockchains affected by this decision is Omni, which was built on top of Bitcoin to enable smart contracts and tokenization. Omni has faced challenges over the years due to the lack of popular tokens and the availability of USDT on other blockchains. Crypto exchanges have favored alternative layers like Ethereum and Tron, making USDT transfers even less popular on Omni.
However, Tether has not given up on Bitcoin entirely. The company plans to issue USDT on RGB, an alternative smart contracts system that leverages Bitcoin’s base layer and lightning network for unparalleled scalability. Tether believes that RGB will usher in a new era for digital assets, smart contracts, and digital rights.
While USDT mints on the affected blockchains have ceased, holders of USDT on these chains will still be able to redeem their tokens for the next 12 months. They can also trade their tokens on exchanges, such as Bitfiniex, for assets on other chains.
Although Omni has struggled to gain adoption, other initiatives for Bitcoin-based stablecoins have emerged in recent years. For example, Stably launched the first stablecoin on Bitcoin’s base layer using the BRC-20 token standard. The creator of BRC-20 has also promoted Taro, a developing protocol for issuing assets on Bitcoin’s lightning network.
In conclusion, Tether has decided to discontinue USDT support on three blockchains due to a lack of significant traction. While Omni has faced challenges, Tether remains committed to Bitcoin and plans to issue USDT on RGB. Holders of USDT on the affected blockchains still have options for redeeming and trading their tokens. Despite the setback with Omni, other Bitcoin-based stablecoin initiatives continue to emerge in the market.