Utexo Plans to Bring USDT Back to Bitcoin Through RGB

Dubai-based blockchain startup Utexo plans to bring Tether’s USDT stablecoin back to Bitcoin on Nov. 28 through RGB, a protocol that keeps asset transaction details off Bitcoin’s public blockchain. Utexo plans to add support for the Lightning Network in the first quarter of 2027.

The system will use Bitcoin as the settlement layer, while RGB will manage asset transfers. Transactions are validated by the parties involved, with cryptographic commitments recorded on Bitcoin to help secure the transfers.

“ You can actually achieve any speed you want to achieve,” Utexo co-founder and CEO Viktor Ihnatiuk said. “Bitcoin is the best blockchain. Lightning is the best technology to scale payments.”

RGB has been in development since 2016. It allows digital assets to be issued and transferred through contracts linked to Bitcoin without recording every transaction on the network. RGB is not a sidechain or rollup, and it does not require Bitcoin to operate like Ethereum.

RGB can connect to the Lightning Network, allowing assets to move through payment channels without a new Bitcoin base-layer transaction for each transfer. Utexo says the system could give businesses Bitcoin-based settlement while keeping transaction details private. The company expects to disclose selected information for compliance and respond to law enforcement requests when required.

Ihnatiuk said Lightning could process transactions in about 100 milliseconds. Utexo’s planned Lightning support, however, will not be available until the first quarter of 2027.

USDT has a supply of about $300 billion across blockchain networks, including Ethereum and Tron, according to DeFiLlama. Utexo does not expect Bitcoin to replicate Ethereum’s decentralized finance ecosystem or compete with Tron mainly for retail payment volume. The company is focusing on payments, escrow transactions and other simpler financial arrangements.

Tether first launched USDT on Bitcoin in 2014 through the Omni protocol. It stopped issuing USDT through Omni in August 2023, citing declining usage. Tether announced plans to issue USDT through RGB in August 2025, but that launch did not occur. Tether later led Utexo’s $7.5 million seed funding round in March. Utexo plans to launch the Bitcoin version through Tether’s USDT0 protocol.

Utexo opened early access to its USDT Mint product on Oct. 22. Verified professional operators, including exchanges, wallets and market makers, can test minting, confidential transfers and redemptions on Bitcoin’s Signet test network before the planned public launch.

Mint uses a cross-network process. It locks USDT0 on Arbitrum before issuing an equivalent amount of USDT on Bitcoin through RGB. To redeem the Bitcoin-based token, a user burns the RGB asset and triggers the release of the corresponding funds on Arbitrum.

The arrangement depends on the connection between Bitcoin and Arbitrum and on the availability of the locked USDT0. Bridges between blockchain networks have previously been targeted in attacks, creating an additional risk for users. Utexo says Oxorio audited Mint, although the complete audit report has not been made public.

Utexo has named UniSat as a launch partner for USDT transfers and swaps through its wallet. The startup is also working with 12 over-the-counter network partners and has another 40 in its pipeline.

Ihnatiuk said Bitcoin miners could exchange BTC for USDT directly on Bitcoin, reducing the need to send funds to centralized exchanges and supporting automated hedging strategies. Utexo is targeting $1 billion in USDT on Bitcoin during its first year. Ihnatiuk described $10 billion as his initial target and $5 billion as his median target. He expects higher USDT activity to generate additional transaction-fee revenue for Bitcoin miners.