Tether reverses USDT freezing on 5 chains, allows transfers, but ends issuance

Tether has said that while USDT transfers on the five blockchains remain possible, no new USDT will be issued or redeemed.
Tether is shifting its focus to Ethereum, Tron, and other high-demand networks.
The stablecoin market is projected to reach $2T by 2028 amid rising US support.

Tether has adjusted its earlier plan to freeze USDT smart contracts on five blockchains, opting instead to let users continue transferring tokens while halting issuance and redemption.

The change affects Omni Layer, Bitcoin Cash SLP, Kusama, EOS, and Algorand, networks that now represent only a fraction of USDT circulation.

A shift from freezing to phasing out

In July 2024, Tether announced it would cease redemptions and freeze tokens on the five chains starting September 1, 2025. However, in an August 29 communication, the company seems to have reversed the freeze, opting for a halt to issuance and redemption.

However, following feedback from the communities tied to those blockchains, the company has revised its approach.

While transfers will remain possible, Tether will no longer mint or redeem tokens on these chains, effectively leaving them unsupported.

This move marks the end of an era for Omni Layer in particular, once the foundation for USDT issuance, now holding just under $83 million.

EOS trails with a little over $4 million, while the remaining chains each carry less than $1 million.

In contrast, Ethereum and Tron dominate the stablecoin’s footprint, with more than $150 billion issued between them.

Focus shifts to high-demand ecosystems

The decision underscores Tether’s strategy of consolidating around chains with strong liquidity and developer activity.

Ethereum, Tron, and BNB Chain remain the company’s priority networks, while newer platforms such as Arbitrum, Base, and Solana are gaining traction, particularly for rival USDC.

By reducing attention to legacy blockchains, Tether aims to streamline resources toward ecosystems that promise scalability, user demand, and integration with broader digital finance.

Stablecoins entering a new policy era

Tether’s recalibration highlights the balancing act between legacy commitments and future opportunities.

While tokens on Omni, EOS, and other discontinued chains remain transferable, the company’s attention is firmly fixed on larger, more dynamic ecosystems.

At the same time, traditional finance players such as Western Union are exploring stablecoins to modernise remittances and improve currency conversion, pointing to a broader wave of adoption.

Additionally, the timing of Tether’s move coincides with growing policy support for stablecoins in the United States.

The recent GENIUS Act, signed by President Trump, provides regulatory backing for dollar-pegged assets as a tool to extend US currency influence in digital markets.

In addition, the US Treasury projects that the stablecoin sector could exceed $2 trillion by 2028, up from its current $285.9 billion.

Ripple’s chief executive has suggested growth may accelerate even faster, potentially reaching that mark within just a few years.

As stablecoins expand into payments, savings, and global transfers, Tether’s shift reflects both market realities and the demands of a sector rapidly preparing for trillion-dollar growth.