In a surprising move, Tether, the issuer of popular stablecoin USDT, announced the discontinuation of its Bitcoin, Kusama, and Bitcoin Cash-based stablecoins due to inadequate usage. The Bitcoin version of Tether was one of the first stablecoins invented and rapidly grew to overshadow other stablecoins such as BitUSD and NuBits.
Reflecting on this significant step, especially concerning Omni, Tether acknowledged the crucial role Omni, the first transport layer employed in 2014, had played in propelling Tether’s initial journey. An integral build on top of Bitcoin, it was lauded for its significant contributions to the crypto landscape. Yet, the lack of popular tokens and availability of USDT on other blockchains compromised Omni’s utility, leading exchanges to prefer other transport layers.
In response to dwindling use of USDT Omni, the company had to cease its issuance. However, Tether is considering the possibility of reinstating the Omni Layer version if its utilization increases, while also planning to introduce a new Bitcoin-based smart contract system titled “RGB”. Furthermore, Tether intends to reissue itself in an RGB version, effectively reintegrating with the Bitcoin blockchain.
Additionally, increasing competition in 2023 among stablecoins has started to challenge Tether’s dominance. This includes Paypal releasing its Paypal US Dollar (PYUSD) stablecoin and Binance‘s listing of First Digital USD (FDUSD).
Tether has clarified that no new tokens will be executed on Bitcoin Omni Layer, Kusama, or Bitcoin Cash. Nonetheless, redemptions will be possible for at least a year with further declarations before the year ends on the handling of redemptions post that time.
This decision is poised to impact the trajectory of stablecoins within the crypto domain, bringing into sharp reality usage concerns that fuel shifts in technological preference. At the same time, it opens a new chapter for Tether to explore and potentially innovate upon other blockchain platforms. How this would shape Tether’s presence in the market, as well as its relation with other stablecoins, is yet to be seen.