In its recent announcement, Tether confirmed discontinuing Bitcoin stablecoin, alleging underutilization. The issuer of the global largest USDT stablecoin by market capitalization and daily transactions volume terminated Bitcoin-based stablecoin.
The move by Tether confirms it is ending the issuance of the Bitcoin Omni Layer. Nonetheless, users will still redeem the Bitcoin stablecoin for a year. The discontinuation of the Bitcoin Omni Layer version arises from its failure to draw interest from users.
Tether Retains Redemption Despite Terminating USDT Omni Version
Tether’s decision marks the end of one of the pioneer stablecoins. Besides terminating the Bitcoin version of Tether, the axe extends to versions of Kusama (KSM) and Bitcoin Cash (BCH).
The Thursday, August 17 announcement rules out subsequent issuance of Tether tokens on the three platforms. The team clarified Tether would retain redemptions for at least 12 months. The team indicated that it would issue updates in the future, though, before the 2023 conclusion. However, the update would illustrate how Tether would handle redemptions.
The Bitcoin Omni Layer involves a smart-based contract running on the Bitcoin blockchain. The Bitcoin-based version of Tether was initially identified as Mastercoin during its unveiling in July 2013. Its release preceded Ethereum by two years.
The Omni Layer Tether would become the inaugural stablecoin on the platform when released in October 2014. It proliferated, with its market capitalization overtaking existing stablecoins, including NuBits and BitUSD.
Revisiting Omni Layer Input to Crypto Landscape
The statement by Tether’s team acknowledged the critical input that Omni Layer Tether contributed to the digital assets history. The August 17 announcement indicated that Omni was the pioneer transport layer leveraged by Tether back in 2014. The Omni Layer running on the Bitcoin facilitated innovations extending beyond Tether, benefiting the entire crypto landscape.
Tether’s team acknowledged that Omni Layer confronted various challenges, particularly for lacking popular tokens. Also, the availability of USDT running on other blockchains made Omni Layer suffer declining popularity.
The situation convinced the majority of exchanges to utilize alternative transport layers to Omni. Such preferences contributed to the decline witnessed in USDT Omni utilization, a reason for discontinuing its issuance.
Tether’s USDT Stablecoin Set for Fierce Competition With New Entrants
Tether admitted that it would reexamine the re-issuance of the USDT Omni version, particularly when Omni usage increases. Nonetheless, Tether revealed that it had an ongoing project to run on a Bitcoin smart contract identified as RGB.
The announcement illustrated that its completion would see Tether reissued in RGB, restoring Tether on the Bitcoin blockchain. Tether’s move coincides with a period when the stablecoin segment is witnessing increasing competition.
Recent entries are poised to challenge Tether’s dominance. Binance, in a July 26 statement, confirmed issuing the First Digital USD (FDUSD) only for Paypal to unveil the PayPal USD (PYUSD) on August 7.
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