Utexo, a Dubai-based blockchain startup, is preparing to bring Tether's dollar-backed stablecoin (USDT) back to Bitcoin after a three-year absence. The integration will use RGB, a protocol designed to keep asset transaction data off-chain while maintaining Bitcoin-based settlement security.
USDT previously existed on Bitcoin from 2014 through the Omni protocol before Tether halted issuance in August 2023, citing declining usage. Tether led Utexo's $7.5 million seed round in March and will support the launch through its USDT0 protocol.
The public launch is scheduled for November 28, with Lightning Network support planned for Q1 2027. Early access began October 22 on Bitcoin's Signet test network for professional operators including exchanges, wallets, and market makers.
Why RGB and privacy matter
RGB has been in development since 2016 and allows users to issue and transfer digital assets through contracts tied to Bitcoin without recording every transaction detail on its public blockchain. Parties validate asset transactions themselves while cryptographic commitments anchored to Bitcoin help secure the system.
Utexo co-founder and CEO Viktor Ihnatiuk states that RGB combined with Bitcoin's settlement layer addresses two key needs: speed and privacy. Bitcoin's transparency has historically hampered business adoption, as many firms prefer to keep purchases and transaction counterparts confidential. Ihnatiuk notes that the company can selectively disclose transaction information for compliance purposes and has procedures for responding to law enforcement requests.
Integration with Lightning Network
RGB works with the Lightning Network, enabling USDT to move through payment channels without requiring base-layer transactions. Ihnatiuk claims this achieves transaction speeds measured in hundreds of milliseconds.
Users can mint USDT on Bitcoin by locking USDT0 on Arbitrum through Utexo Mint. Redemption requires burning the RGB asset to trigger the release of corresponding funds on the source network. Utexo says Mint has been audited by Oxorio, though the full audit report remains unpublished.
Market positioning
More than $300 billion in stablecoin supply currently circulates on networks like Ethereum and Tron. Ihnatiuk argues that Bitcoin's strengths lie in payments and simpler financial arrangements rather than complex DeFi ecosystems. He notes that potential users include miners who could swap Bitcoin for USDT directly on-chain rather than using centralized exchanges.
Utexo has named UniSat as a launch partner and reports working with 12 over-the-counter network partners, with another 40 in its pipeline.
First-year targets
Ihnatiuk set ambitious goals for USDT adoption on Bitcoin, stating a minimum milestone of $1 billion in the first 12 months, an initial goal of $10 billion, and a median goal of $5 billion.
