Utexo, an infrastructure project under Tether, plans to issue USDT on the Bitcoin blockchain by the end of this month, BlockTempo reported. The version will run on the RGB protocol and is designed to support private transfers, direct BTC swaps, and bitcoin-backed lending, with transaction details kept off Bitcoin’s main public ledger.
The report describes the launch as USDT’s first return to the Bitcoin ecosystem in more than a decade, since its original 2014 issuance during the Omni era. USDT, with a market value approaching $190 billion, first appeared on a Bitcoin-based protocol before Ethereum became its main network and Tron emerged as another major venue because of lower fees.
Utexo says it has a commercial license from Tether
Utexo was founded in 2025 and completed a $7.5 million seed round earlier this year, according to the report. It said Tether granted it a commercial license to use the USDT trademark and issue the token on Bitcoin, allowing exchanges, wallets, and payment providers to integrate the asset.
Utexo co-founder Viktor Ihnatiuk confirmed the authorization to CoinDesk on Telegram. He said, 「Tether has always been a Bitcoin company. For them, Bitcoin is a safe haven, like gold.」
Tether Chief Technology Officer Paolo Ardoino also backed the move in a post on X, writing, 「USDT on Bitcoin. It's coming home」. The report added that, according to previous coverage, Tether is already the 11th-largest whale on Bitcoin, with holdings of more than 55,000 BTC.
How RGB handles privacy on Bitcoin
Utexo’s system is built on RGB, a protocol that uses client-side validation. Under that design, transaction details stay between the two parties involved and do not enter Bitcoin’s public ledger.
BlockTempo said RGB assets use unspent transaction outputs, or UTXOs, as their ownership anchor. In practice, the Bitcoin ledger proves ownership of a UTXO, but what that UTXO contains and who it is transferred to do not appear on-chain.
That stands in contrast with the account-based model used by Ethereum and Tron. On those chains, each USDT transfer is visible on a public ledger, including sender, receiver, and amount. RGB pushes that data off-chain and leaves verification to the transacting parties while using Bitcoin’s UTXO structure as proof of ownership.
Ihnatiuk added, 「I can’t speak directly for Tether, but from what I’ve seen, Bitcoin is a major focus for them. Our job is to make USDT on Bitcoin as usable as it is on other chains.」
Three main use cases
Utexo has outlined three primary use cases for Bitcoin-based USDT:
- private USDT transfers for users who do not want fund flows exposed on-chain;
- direct BTC-USDT swaps without routing through a centralized exchange;
- bitcoin-collateralized lending, allowing borrowers to use native BTC as collateral instead of wrapping it into WBTC and moving it onto Ethereum or another chain.
The report said those functions map directly to three gaps in Bitcoin DeFi: liquidity, swap efficiency, and collateral usability. It added that DeFi on Bitcoin has long been constrained by limited on-chain capacity and a lack of stablecoin liquidity pools, while RGB’s off-chain validation model is intended to work around those constraints.
Compliance model relies on a blacklist of UTXOs
Because RGB assets are tied to Bitcoin UTXOs, Utexo cannot freeze an address in the same way Tether can on Ethereum. The report noted that Ethereum’s USDT contract has a built-in freeze function, allowing Tether to lock all USDT in a given wallet. RGB does not use that kind of centralized contract structure.
Instead, Utexo said it will maintain a blacklist of UTXOs associated with sanctioned entities or illegal activity and distribute that list to exchanges and other service providers. A flagged UTXO would not disappear, but it would become non-redeemable. According to the report, it could no longer be sent back to a bridge or minting tool, and it could not be withdrawn to Ethereum or Tron.
Ihnatiuk said, 「That UTXO simply becomes non-redeemable, and no one can operate it anymore.」
BlockTempo said the setup is more distributed at the technical level than Ethereum-style freezing, but has a similar effect for compliance purposes because blacklisted UTXOs can be intercepted once they reach an exchange or bridge entry point. The report added that this structure also fits Bitcoin’s decentralization ethos, since Tether cannot unilaterally freeze a personal wallet.
Next step: Lightning Network
After the Bitcoin launch goes live, Utexo’s next step will be to extend USDT to the Lightning Network. The report described Lightning as a Layer 2 network for Bitcoin built for faster and cheaper payments, and one that is currently used mainly for BTC micropayments.
If USDT moves onto Lightning, the stablecoin could circulate inside the Bitcoin ecosystem with near-zero fees and settlement in seconds, the report said. It described that as an important step for cross-border payments and everyday transactions.
USDT returns to Bitcoin
The report said stablecoin efforts tied to Bitcoin have so far relied mostly on bridges or Layer 2 systems, including cross-chain combinations involving WBTC and USDT, as well as projects such as Merlin and Babylon. Those approaches, it said, either carry higher fees or remain limited in ecosystem size.
By embedding USDT directly into Bitcoin’s UTXO model through RGB, and by offering APIs and SDKs for exchanges and wallets to integrate quickly, Utexo is presenting the product as native stablecoin infrastructure for Bitcoin DeFi. The report also noted Tether’s long-running commitment to use 15% of net profit to buy bitcoin, alongside holdings of more than 55,000 BTC, framing the return of USDT to Bitcoin as part of Tether’s broader positioning around the network.