Tether, the company behind USDT, is preparing to issue the stablecoin on Bitcoin via the RGB protocol version v0.11.1. Rolled out by the UTEXO software lab, USDT is set to return to the chain where it was first launched in 2014 via the Omni-Mastercoin layer.
UTEXO, the company leading the commercial rollout, has positioned itself as the issuer and distributor of this Bitcoin-native USDT in partnership with Tether. “Finally, after eight years of development – if not more – we are the company launching USDT over Bitcoin with the strong support of Tether,” said Viktor Ihnatiuk, UTEXO co-founder, in an exclusive interview with Bitcoin Magazine.
The RGB protocol combines its new client-side validation with the Lightning network for instant, private settlements while anchoring security to Bitcoin’s UTXO model. Users can expect to be able to handle USDT at native Bitcoin addresses as well as send and receive it over the Lightning network with compatible wallets.
The RGB protocol on Bitcoin also offers significant privacy features to USDT users, as the asset takes advantage of Bitcoin’s UTXO model, which standardizes new addresses for each transaction, compared to the account-based address commonly reused in EVM blockchains such as Tron, Ethereum or Solana. Address reuse is the first flaw in onchain privacy, yet most altcoins built their interfaces to reuse addresses, despite the risk it poses to users. RGB’s integration with the Lightning network further protects user privacy by moving USDT via the offchain payment network, leaving few marks on the public blockchain. The deep integration with Tether also means there are fewer middlemen charging extra fees or collecting data.
On the topic, Vktor emphasized that “We built Utexo to allow USDT to move on Bitcoin the way money should move: instantly, privately, without cost surprises. Our partners integrate our API once and can direct USDT on the most resilient open network ever built, with full control over the cost structure.”
UTEXO vs TRON
UTEXO emerged from a joint venture involving Viktor’s Boosty Venture Studio, Fulgur Ventures and Tether Investments. The goal was straightforward: bring RGB to the mainnet after years of delays under previous development teams. The protocol had been in active development since at least 2016, but was not ready for the 2017 bull market, giving TRON blockchain dominance over USDT volume and usage throughout the developing world, a dominance it still maintains.
UTEXO to specifically build the “last mile” of software needed for broad USDT deployment across the Bitcoin ecosystem, which includes a software development kit, APIs, middle-level protocols, UI design work, and even a mint bridge that’s live today at mint.utexo.com. This bridge lets users move USDT across popular blockchains with “deterministic low fees” and without intermediaries thanks to its direct integration with Tether as the primary coin. The RGB protocol layer was developed by Bitfinex R&D Strategist Federico Tenga.
“Right now, if you want to exchange USDT to Bitcoin, you have to pay high fees for all these wallets, which charge you a one percent wallet fee plus a one percent plus swap provider fee, and you also have a one percent slippage, so you pay three percent, and you also wait forever for the exchange to happen,” Viktor told Bitcoin Magazine, adding that; “With USDT and Bitcoin over Lightning, for the first time you have two main assets on one chain, you can exchange instantly without any slippage. You can exchange decentralized USDT to Bitcoin and back on-chain. The price is almost the same as spot markets in Binance.”
Networks like Tron, which are primarily used to move USDT, also add extra fees, swap commissions and friction to the user experience. They require a different address type, with fees paid in an asset like TRX, which is only used to move the stablecoin. With most of the money in the crypto market concentrated in Bitcoin and Tether, having to buy an altcoin just to pay fees ends up feeling like red tape.
Bitcoin, like the payment rails for USDT, also comes with blockchain security levels that other chains simply cannot offer. While USDT will always be fundamentally centralized in Tether as a company, the rails can also add risk, for example if a contentious fork occurs or major bugs are found on new blockchain systems. Being the oldest and most conservative blockchain, Bitcoin provides a kind of quality assurance that cannot be matched by other chains.
RGB traces its roots to Peter Todd’s disposable seal back in 2014 and was formalized in 2016 by Giacomo Zucco and Riccardo Casatta. The RGB acronym, originally derived from “Riccardo Giacomo Bitcoin”, was later renamed “Really Good Bitcoin”. Tether explored the protocol early on, but faced delays with the previous team. Had RGB shipped on schedule around 2019, the stablecoin landscape and broader DeFi industry might have evolved differently around Bitcoin’s UTXO model instead of Ethereum’s account-based system.
As such, bringing USDT back to Bitcoin is a core motivation for UTEXO. Viktor did not mince words on the matter: “For the first time in eight years or nine years, USDT is coming home again. We have no chance to fail. If we fail, no one will think of Bitcoin as a settlement layer anymore.”
USDT on Bitcoin via RGB is expected to launch within weeks, possibly this July, with wallets such as Tether Wallet announcing support and exchanges around the world announcing integrations.