Stablecoin leader Tether is making waves in the cryptocurrency world by halting the issuance of new USDT tokens on the EOS and Algorand blockchains. According to an official blog post on June 24, the discontinuation will take effect immediately, with the promise of continued USDT redemption on these blockchains for the next 12 months.

A Strategic Move Aligned with Tether’s Ecosystem Goals

In their announcement, Tether emphasized that the decision aligns with their broader strategy to maintain equilibrium within the Tether ecosystem. They meticulously assess the security architecture of networks to ensure they're secure, usable, and sustainable. According to Tether, the ultimate aim is to allocate resources in ways that enhance security and promote innovation. The company’s statement reads:

"We assure our community that this transition will be executed meticulously and with minimal disruption. Our top priority remains delivering a seamless user experience, and we are committed to facilitating a hassle-free transition."

Minimal Market Impact

Despite the news, the impact on the market is expected to be insignificant. As of June 22, the total EOS-based Tether in circulation was approximately $75.5 million—merely around 0.06% of the overall USDT supply nearing $113 billion. Algorand holds an even smaller fraction of the pie, with about $17 million worth of USDT, representing just 0.01% of the total circulating supply.

Market Insight Quote

"We assure our community that this transition will be executed meticulously and with minimal disruption. Our top priority remains delivering a seamless user experience, and we are committed to facilitating a hassle-free transition."

Tether Official Statement

The Broader Picture: An Industry in Transition

This move comes in a broader context where alternative blockchain networks are increasingly being scrutinized for their low usage. Even though EOS and Algorand are among the 17 blockchains that facilitate Tether transactions—including major players like Ethereum, Tron, and Solana—their minuscule market share raises questions about their viability. This shift could be a harbinger of a downturn in transaction volumes across less-utilized networks, pointing to a possible ecosystem-wide contraction.

Historical Context and Future Moves

The discontinuation follows Tether's earlier decisions to halt minting on other blockchains. Back in August 2023, Tether stopped issuing USDT on Kusama, Bitcoin Cash SLP, and the original Omni Layer Protocol on the Bitcoin blockchain. The first Tether tokens were issued on Omni in October 2014.

Meanwhile, Tether continues to integrate new blockchain networks, evident from their recent moves. The stablecoin giant recently incorporated The Open Network (TON), minting around $500 million worth of stablecoins based on TON by April 2024. This proactive addition represents about 0.44% of the circulating USDT supply.

Conclusion

Tether’s strategic pivot away from EOS and Algorand highlights a dynamic shift within the cryptocurrency ecosystem. It underscores Tether’s commitment to refining its operations while alerting stakeholders to the dwindling use of certain blockchain platforms. As the crypto landscape evolves, Tether's adjustments reflect an ongoing effort to bolster innovation and security in the spaces they deem most promising.

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