Dubai-based startup Utexo is preparing to bring Tether's USDT stablecoin back to Bitcoin using the RGB protocol, marking the first major effort to restore USDT to the network after Tether halted issuance there in August 2023.
Utexo plans a public launch on November 28, with Lightning Network support expected in the first quarter of 2027. Tether led the startup's $7.5 million seed round in March.
Why USDT Is Returning to Bitcoin
USDT originally launched on Bitcoin in 2014 through the Omni protocol. Tether cited falling usage when it ended issuance on the network in August 2023. The company had previously floated an RGB-based launch in 2025, though that plan did not materialize.
Utexo CEO Viktor Ihnatiuk argues that two factors make a new attempt viable: speed and privacy. Bitcoin serves as the settlement layer, while the RGB protocol keeps transaction details off the public blockchain. The CEO claims Lightning payments can settle in approximately 100 milliseconds.
How RGB Technology Works
RGB, which has been in development since 2016, allows users to issue and move assets through contracts tied to Bitcoin without publishing every transaction detail on-chain. Participants validate transfers independently, with cryptographic commitments anchored to Bitcoin providing security. The protocol is neither a sidechain nor a rollup.
RGB integrates with Lightning, enabling USDT to move through payment channels without requiring a base-layer transaction each time. Utexo argues that privacy features will appeal to businesses that prefer not to expose their counterparties on a transparent ledger. The company states it can selectively disclose data for compliance purposes and respond to law enforcement requests.
Bridge Risk and Market Challenges
Transferring existing USDT tokens onto Bitcoin requires locking USDT0 on Arbitrum before an equivalent amount is minted on Bitcoin. Redemption reverses this process by burning the RGB asset. This structure creates security dependencies on the bridge in addition to Bitcoin and RGB itself. Bridges have historically been targets for security exploits.
Utexo opened early access to its USDT Mint product on October 22, allowing verified exchanges, wallets, and market makers to test minting and redemption on Bitcoin's Signet network.
Utexo has set targets of at least $1 billion in Bitcoin-based USDT within 12 months, with a median target of $5 billion and an upper goal of $10 billion. The project faces competition in an environment where approximately $300 billion in stablecoins already operates on Ethereum, Tron, and other networks.
