TLDR
- Dubai-based startup Utexo plans to relaunch Tether’s USDT on Bitcoin using the RGB protocol, with a public launch scheduled for November 28.
- Lightning Network integration is anticipated in the first quarter of 2027.
- The initiative enters an ecosystem where approximately $300 billion in stablecoins already resides on Ethereum, Tron, and alternative networks.
- Bridge vulnerability and restricted DeFi utility continue to present the primary obstacles.
Why USDT Is Returning to Bitcoin
Utexo is now stepping in to tackle this challenge. Following Tether’s leadership in the startup’s $7.5 million seed funding round in March, this upcoming iteration will utilize Tether’s USDT0 protocol.
Viktor Ihnatiuk, the CEO, asserts that speed and privacy are the two defining shifts. Bitcoin serves as the foundational settlement layer, whereas RGB ensures transaction specifics remain off the public ledger. Furthermore, he states that Lightning payments are capable of settling within roughly 100 milliseconds.
How RGB and Lightning Fit Together
In development since 2016, RGB enables individuals to issue and transfer assets via smart contracts linked to Bitcoin, avoiding the need to broadcast every specific detail on-chain. Transfers are validated independently by participants, anchored securely by cryptographic commitments made to the Bitcoin blockchain. It functions neither as a sidechain nor as a rollup.
Additionally, the protocol integrates with Lightning, permitting USDT transfers via payment channels without requiring a base-layer transaction for every movement. Utexo anticipates that this confidentiality will attract commercial entities averse to revealing their business partners on an open ledger. The firm notes it retains the capability to selectively reveal data to satisfy regulatory compliance and address law enforcement inquiries.
Bridge Risk Raises Questions
On October 22, Utexo launched early access for its USDT Mint product, granting pre-screened exchanges, wallets, and market makers the ability to test the minting and redemption processes on Bitcoin’s Signet test network.
Moving current tokens to Bitcoin necessitates locking USDT0 on Arbitrum prior to minting a matching amount on the Bitcoin network. Conversely, redeeming the tokens reverses this workflow by destroying the RGB asset. Consequently, the overall security relies not just on Bitcoin and RGB, but also on the bridging mechanism—a vector that has historically been a prime target for hackers.
Utexo aims to secure a minimum of $1 billion in Bitcoin-native USDT within a 12-month window, targeting a median of $5 billion and an upper goal of $10 billion. The ultimate test will be whether actual market demand emerges.
Written by
Yuki Yamamoto
