Tether has decided to forgo its plans to launch its own blockchain, citing market saturation and strategic considerations.
Reasons for Abandoning Blockchain Plans
In an interview with Bloomberg News, Tether CEO Paolo Ardoino explained that with the current abundance of high-quality blockchains, introducing a new one might not be the most prudent move. Ardoino emphasized that the blockchain space has become increasingly commoditized, with many platforms offering similar functionalities. As a result, Tether intends to remain 'agnostic' and continue using existing blockchains as 'transport layers' for USDT, prioritizing sustainability and security.
Tether's Expansion on Other Networks
Despite shelving its blockchain plans, Tether has been expanding its presence on other networks. Earlier this month, it launched USDT on the Aptos blockchain, aiming to reduce transaction costs and enhance global accessibility. The integration capitalizes on Aptos’ speed and scalability, offering users minimal gas fees. This decision follows Aptos’ impressive growth, including a record-breaking 157 million transactions in a single day in May.
Tether's New Initiatives
In addition, Tether has partnered with the United Arab Emirates’ Phoenix Group and Green Acorn Investments to introduce a dirham-backed stablecoin. This new stablecoin will be fully backed by liquid UAE-based reserves, providing users with access to AED benefits. This move signifies Tether’s expansion into non-dollar stablecoins, as the company seeks to tap into the UAE’s growing reputation as a global crypto hub. Stablecoins, which are digital assets pegged to fiat currencies, offer a hedge against the volatility of cryptocurrencies like Bitcoin. Tether’s USDT, the largest stablecoin, currently dominates the market with a capitalization exceeding $117 billion, accounting for nearly 70% of the stablecoin market. In contrast, stablecoins pegged to other fiat currencies, such as Tether’s euro-pegged EURT, have a much smaller market presence. The introduction of a dirham-pegged stablecoin could diversify Tether’s offerings and meet the growing demand for Gulf currencies.
Thus, by abandoning its blockchain launch plans, Tether continues to expand its presence on other networks and implement new initiatives, such as introducing a dirham-backed stablecoin.
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