Tether's USDT, the world's largest stablecoin with a market capitalization of nearly $190 billion, is expected to return to the Bitcoin network this month. The stablecoin originally debuted on Bitcoin in 2014 on the Omi protocol before Ethereum and Tron became its primary venues.
The return is being facilitated by Utexo, a Tether-backed infrastructure project founded in 2025 that raised $7.5 million in funding earlier this year. Utexo has secured a commercial license to issue USDT on Bitcoin, utilizing the stablecoin's trademark to bring it to wallets, exchanges, and payment providers.
Utexo plans to support three primary use cases: private USDT transfers, direct swaps between native bitcoin and USDT, and lending where borrowers can use native bitcoin as collateral without wrapping it on another blockchain. The infrastructure will keep most transaction data off Bitcoin's public ledger by combining the RGB protocol's client-side validation with Bitcoin's unspent transaction output (UTXO) model. The Bitcoin ledger will be used solely to cryptographically demonstrate proof of ownership.
Because the architecture relies on Bitcoin UTXOs, Utexo cannot technically freeze addresses in the same manner Tether can on Ethereum. Instead, Utexo plans to maintain a blacklist of UTXOs linked to sanctioned or illicit activity, rendering those specific UTXOs unredeemable and unable to bridge back to networks like Ethereum or Tron.
Following the initial launch this month, Utexo's next development step will involve expanding USDT to Bitcoin's Lightning Network layer-2 scaling solution.
