I just saw that USDt supply has dropped by nearly $2.7 billion in the past two months.

This decline is the largest since the FTX collapse in 2022.
It's also interesting when looking at the combined demand and supply curves — on one side, demand remains strong, but supply has shrunk significantly.
This is related to the aggressive freezing activities.
Tether has frozen around $4.2 billion worth of USDT over three years, mostly since 2023.
Governments and enforcement authorities are now heavily relying on Tether to block wallets and freeze suspicious funds.
Recent cases like those assisted by DOJ ($61 million pig-butchering scheme) and Turkey ($544 million suspected gambling) show this trend is intensifying.
So now, stablecoin issuers like Tether and Circle are basically becoming gatekeepers.
Elliptic tracking shows they have already blocked 5,700 wallets with a total of $2.5 billion.
The supply of USDt itself is still above $189 billion, but this movement is worth watching.
Between strict enforcement and shifting market dynamics, the situation is more complex than ever.