Tether Abandons Plans To Launch Own Blockchain, Prioritizes Security and Sustainability of Its Stablecoin USDT

Amid speculation that Tether, issuer of the largest stablecoin in the crypto market USDT, could launch its blockchain, the company's CEO, Paolo Ardoino, has addressed the rumors with key details.

Crypto market giant and issuer of the leading stablecoin USDT, Tether, has addressed rumors regarding its plans to launch a blockchain, with CEO Paolo Ardoino revealing that the company has decided against the move.

In an interview with Bloomberg News, Ardoino highlighted Tether's technological capabilities but stated that blockchains are rapidly becoming a “commodity” in the market.

"We are very good in technology, but I think blockchains will become almost a commodity in the future. Launching a blockchain ourselves might be not the right move. There are very good blockchains."

According to Bloomberg, the stablecoin giant’s decision not to build its blockchain network is significant considering Tether's dominant position in the crypto market. Boasting a market capitalization of $115 billion, USDT is the most widely used stablecoin and serves as a key on-ramp and off-ramp for crypto trading.

However, Ardoino's comments suggest that Tether prioritizes the security and sustainability of its stablecoin over the potential benefits of having a proprietary blockchain.

“For us, blockchains are just transport layers,” he said.

The report also highlights the increasing diversity and competition within the blockchain ecosystem, with data from DeFiLlama indicating that the top five blockchain networks collectively control around 86% of the total value locked (TVL) across 306 chains.

These include the BNB Smart Chain, Ethereum, Polygon, TRON and Avalanche, which host a substantial number of decentralized applications (Dapps) and have contracts issued on their chains, as per DappRadarr data.

However, Ethereum, being the leading blockchain in terms of usage, holds $87.7 billion of the total value locked out of $133.2 billion across all networks. Other blockchains, like TRON, which handles 49% of the USDT supply, have also established themselves as viable alternatives for Tether’s stablecoin.

According to Angela Ang, senior policy adviser at blockchain intelligence firm TRM Labs, the business viability of these blockchains ultimately depends on their ability to offer unique utilities, such as speed, security, cost or interoperability, that aren't already present in the ecosystem.

Tether's decision to remain “blockchain agnostic” suggests the company's focus on ensuring the widespread adoption and usability of USDT rather than tying its stablecoin to a specific blockchain network.

This approach aligns with Ardoino's view that blockchains are increasingly being commoditized and that Tether's priority is providing a reliable and secure stablecoin that seamlessly integrates with various blockchain platforms.

At the time of writing, the total crypto market capitalization has risen to $2.135 trillion from Friday's opening value of $2.09 trillion in response to the recent speech by Federal Reserve Chairman Jerome Powell, hinting at further interest rate cuts.

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