In a surprising twist, Tether, a top stablecoin issuer, announced its decision to end support for its primary stablecoin, USDT, on the Bitcoin (BTC) blockchain.
Shift in Tether’s Stablecoin Approach
Tether recently released a statement, announcing its plan to halt the creation or “minting” of USDT tokens on the Omni platform. This platform supports the BTC version and also operates on Kusama and Bitcoin Cash Simple Ledger Protocol (BCH-SLP) blockchains. The change will take effect from August 17. However, Tether assures its users that the company will continue the redemption process for USDT-Omni, USDT-Kusama, and USDT-BCHSLP for at least another year. This means individuals holding these versions of the stablecoin can still exchange them for their base assets through the designated channels.
Reasons Behind the Decision
The company’s decision stems from its unwavering belief in the potential of blockchain technology and decentralized trading platforms. Even though the current landscape influenced this decision, Tether remains hopeful and open to future possibilities. The company also expressed its willingness to revisit the idea of issuing USDT on the Bitcoin blockchain through the Omni Layer if the environment becomes favorable.
Impact on the Crypto Community
The crypto community has been buzzing about Tether’s unexpected decision to end USDT operations on the Bitcoin blockchain. This change means that the company will not mint or exchange USDT tokens on the Bitcoin network for the foreseeable future, which could impact traders and platforms that use USDT as a trading counterpart.
The Omni Layer’s Role in Tether’s Journey
Tether cites the “insufficient momentum” of the Omni Layer, developed on top of Bitcoin, as the main reason for this change. Various factors, including the rise of alternative transport layers and the absence of popular tokens on the Omni network, have contributed to the reduced USDT activity on Bitcoin via the Omni Layer. Recognizing the importance of this transition, Tether highlighted the pivotal role the Omni Layer played during its inception. The Omni Layer, as Tether’s first transport layer in 2014, significantly contributed to the stablecoin’s early growth. The Omni Layer team’s innovative contributions have significantly influenced the crypto landscape.
