The news is out: Tether's dropping support for Omni Layer, Bitcoin Cash's SLP, Kusama, EOS, and Algorand come September 2025. If you’re one of the impacted, I appreciate your anger and frustration. We know that migrating your USDT can be a painful experience. You could be hit with transition fees and lack clear direction while making the change. Hang on just a second before you grab those pitchforks, because there’s more to the story here. Is this a cold-hearted move in the name of corporate efficiency? Or is it a serious, painful but ultimately necessary surgery to save the life of the crypto patient?
Stability Over Decentralization?
The supposed main selling point of stablecoins is their, uh, stability. A wobbly stablecoin is like a tissue-paper parachute—that doesn’t work any better. Tether’s peg to the US dollar is literally existentially important for the whole crypto ecosystem. Consider it the oil in your engine—without it, all your great ideas and plans come to a screeching halt.
Tether's decision, according to them, is data-driven. Rapidly dropping usage, lack of developer interest and significantly reduced transaction volume on these blockchains indicate they have become such resource sinks. Keeping them going, on the other hand, is like leaving a dripping tap open. Beyond damaging our credibility, it squanders limited taxpayer resources that we could utilize far more impactful and effective ways.
True decentralization is beautiful in theory. It sure does, as it sounds like the digital equivalent of a utopian society. In practice, it’s often inefficient, highly fragmented, and challenging to scale. To effectively maintain a stablecoin peg takes resources, attention, and a level of independence. How can you even begin to do that when you’re spread so thin across a dozen different blockchains? Some of those blockchains are completely empty!
It would be similar to a medium size town still supporting a cutting-edge, competitive hospital. However well-intentioned, at the end of the day, they just don’t have the time, the expertise or the juice. At other times you want to pool investments to make sure that important services like transit are efficiently run and widely available.
The Trade-Off We Must Face
Tether is cutting back, concentrating resources on those networks that provide speed, interoperability, and adoption. They’re looking towards Layer 2 solutions, such as the Lightning Network, and increasing their focus into ecosystems where there’s been proven developer traction. This makes sense from a business perspective. Instead, they need to follow the action, where they can create the most value to most users.
This move inevitably concentrates power. Though these moves contribute to Tether at least slightly consolidating its reputation, they cement Tether as the stablecoin market’s most dominant player. This raises legitimate concerns about regulatory capture. Will Tether end up being too big to fail, too powerful to be regulated? Might this enormous concentration of power allow for some future manipulation or censorship?
These are all reasonable questions, and they cannot be waved away. Consider the alternative. The crypto market is held hostage as a Tether collapse would be catastrophic. We’re four states away from an unavoidable domino effect. It would erase billions of dollars in value and back the industry up by years.
Consider it an analogous situation of a central bank intervening in the foreign currency exchange market. If done well, they’ll never be as transparent as they should be. They need to act to avoid a full-blown crisis, even if it results in unintended consequences.
Centralization's Shadow: A Price Too High?
It's easy to demonize Tether. They're a private company operating in a largely unregulated space, and their history hasn't always been squeaky clean. Let's be honest: no stablecoin is perfectly decentralized or without risk.
I understand the need for Tether’s “cull,” one cannot look past the circumstantial, increased eerie centralization, spooky. What happens in practice though, because who gets to choose which blockchains are deserving of state support. What criteria are used? And what accountability mechanisms exist for users if they feel these decisions are arbitrary and capricious?
Collectively, we cannot allow Tether to erode public trust in our markets, and we must demand better transparency and accountability from them. This is why we must advocate for regulatory frameworks that both protect users and innovation—not at the expense of each other. And we should investigate other decentralization-stablecoin models that achieve decentralization while maintaining stability.
Ultimately, Tether's decision is a gamble. They are betting that a more streamlined, centralized operation will be better equipped to weather the storms of the crypto market. Whether that bet comes good or not is still to play out. One thing is certain: the future of stablecoins, and the future of crypto, depends on it.
So, is it a necessary evil? Maybe. However, coloring the full landscape in rosy political hues misses the significant risks and downsides. The long-term health of crypto requires more than a stable peg. It succeeds on the basis of a deep commitment to decentralization, transparency, and putting users in control. We can’t forget any of those values in the quest for stability.
