Tether suddenly revoked the decision to freeze USDT on five public chains! Issuance and redemption are halted but transfer functions are retained, changing the landscape of the stablecoin market.

The world's largest stablecoin issuer, Tether, suddenly revoked its previous decision on August 29, announcing that it would no longer freeze USDT smart contracts on Omni Layer, EOS, and five other blockchains, but would permanently halt token issuance and redemption services on these chains. The total circulating supply of USDT on the affected chains accounts for only 0.05%, reflecting that Tether is concentrating resources on deepening its engagement in high-demand ecosystems like Ethereum and TRON. This move coincides with Trump signing the GENIUS Act to promote the globalization of the USD stablecoin, with the U.S. Treasury predicting that the stablecoin market will surpass $2 trillion by 2028.

Policy reversal and user protection

Tether stated in an official announcement that it has revised the original freezing plan based on feedback from ecosystem participants: "Tether has modified the plan and will not freeze the smart contracts on these networks." This means that although the USDT on these chains will no longer receive official technical support, users can still transfer tokens independently. This "soft exit" strategy not only avoids potential user asset losses caused by a sudden freeze but also achieves optimized resource allocation.

Analysis of the circulating supply of affected chains

According to DeFiLlama data, the circulating supply of USDT on the five affected public chains is negligible:

• Omni Layer: $82.9 million (formerly the original issuance chain of USDT)
• EOS: 4.2 million USD
• Bitcoin Cash SLP: <1 million USD
• Kusama: <1 million USD
• Algorand: <1 million USD

The total on-chain USDT is less than 0.05% of the total Circulating Supply of 167.4 billion USD, reflecting the result of natural market selection.

Tether Multi-Chain Strategic Evolution

Tether has gradually reduced support for these chains since 2023:

• Stopped new issuance of Omni, Kusama, and Bitcoin Cash SLP in August 2023
• Support for EOS and Algorand will end in June 2024.

Currently, the main resources are concentrated on two major blockchains:

• Tron: $80.9 billion USDT (48.3% share)
• Ethereum: 72.4 billion USDT (43.2%)

Emerging chains like Arbitrum, Base, and Solana are also growing rapidly, but these ecosystems are more inclined towards the competitor USDC.

Regulatory Promotion and Market Opportunities

This adjustment comes as the United States makes significant strides in stablecoin regulation. The GENIUS Act, signed by Trump, aims to strengthen the global position of the dollar by supporting stablecoins pegged to the dollar. The U.S. Treasury predicts that the stablecoin market will surpass $2 trillion by 2028, raising higher demands for liquidity and cross-chain interoperability.

Ripple CEO Brad Garlinghouse also predicts that the stablecoin market will grow from its current scale of $250 billion to $2 trillion in a few years: "Many believe it will reach a scale of $1-2 trillion in the coming years." Western Union CEO Devin McGranahan revealed that they are exploring the use of stablecoins to transform the global remittance business, improving currency exchange in underserved markets and providing financial tools for regions with unstable local currencies.

Industry Impact and Future Outlook

Tether's recent policy adjustment conveys three key signals:

1. Resource centralization: Concentrating technical resources in high-activity ecosystems to enhance operational efficiency.
2. User Autonomy: Even if support is stopped, users retain control over their assets to avoid centralized freezing disputes.
3. Regulatory compliance preparation: Prepare for the upcoming stablecoin regulatory framework and enhance system transparency.

According to CMC data, the current total market value of stablecoins reaches 285.9 billion USD, with USDT (167.4 billion USD) and USDC (71.5 billion USD) dominating the market. As traditional financial institutions accelerate their entry, the stablecoin market is facing a reshuffle.

Conclusion

Tether's policy reversal reflects the art of balancing decentralized finance with traditional regulation. By halting official services while retaining users' rights to transfer, it respects the immutable nature of Blockchain and achieves a commercial strategic adjustment. With the advancement of the U.S. GENIUS Act and the entry of traditional financial giants, the stablecoin market is set to enter a new phase of explosive growth. Investors should pay attention to the development trends of mainstream public chain ecosystems while being wary of market volatility risks brought by changes in regulatory policies.