Tether Reverses Course in Response to Regulatory and User Pressure

Written by Ohris M. Greyoon, Blockchain & Crypto Expert

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Source: Coinmarketcap

Updated: Aug 31 2025

Tether's Strategic Reversal on USDT Support

Backtrack on Blockchain Support: Tether has decided to continue supporting USDT on five historic blockchains—Omni Layer, Bitcoin Cash SLP, Kusama, EOS, and Algorand—contrary to its previous announcement to cease operations by September 1, 2025. This decision was influenced by community feedback, highlighting the importance of user sentiment in Tether's strategy.
Current USDT Market Position: Despite the initial plan to withdraw, USDT remains a dominant player in the stablecoin market with a capitalization of $167.4 billion, primarily on Ethereum and Tron, which hold $72.4 billion and $80.9 billion in circulation, respectively.

Reasons Behind the Decision

Community Feedback and Reputation: Tether's reversal reflects a strategic choice to avoid reputational damage that could arise from abandoning certain ecosystems. The company acknowledged the low circulation of USDT on some blockchains, with only 250,000 on Kusama and under a million on Bitcoin Cash, but opted for a more diplomatic approach.
Strategic Compromise: Tether's new strategy allows for wallet transfers while halting direct issuance and redemption of USDT on these blockchains. This compromise reassures users and enables Tether to concentrate resources on more promising networks.

Regulatory Considerations and Future Directions

Navigating Regulatory Challenges: Tether's decision is also influenced by the evolving regulatory landscape, including the upcoming "stablecoin bill" in the U.S. and the MiCA regulations in Europe. By reducing exposure to less regulated blockchains, Tether aims to mitigate legal risks.
Long-term Strategy and Innovation: Beyond issuing USDT, Tether is investing in innovative technologies, such as autonomous AI and open-source applications for bitcoin mining. This diversification strategy is intended to strengthen its market position and adapt to the maturing crypto landscape, where relevance and innovation are crucial for survival.

About the author

Ohris M. Greyoon

Ohris M. Greyoon holds a Master’s in Computer Science from MIT and has 10 years of experience in blockchain technology and cryptocurrency markets. A pioneer in decentralized finance (DeFi) analysis, he leads Intellectia’s Crypto News, offering cutting-edge insights into digital assets.