Utexo Bets on Privacy to Bring USDT Back to Bitcoin

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TLDR

• Dubai-based startup Utexo plans to relaunch Tether’s USDT on Bitcoin using the RGB protocol, with a public launch set for November 28.
• Lightning Network support is expected in the first quarter of 2027.
• The project faces a market where roughly $300 billion in stablecoins already sits on Ethereum, Tron and other networks.
• Bridge risk and limited DeFi support remain the main hurdles.

Why USDT Is Returning to Bitcoin

USDT first appeared on Bitcoin in 2014 through the Omni protocol. Tether ended issuance there in August 2023, blaming falling usage. The company later floated an RGB-based launch in 2025, but it never materialized.

Now Utexo is taking up the task. Tether led the startup’s $7.5 million seed round in March, and the new version will rely on Tether’s USDT0 protocol.

CEO Viktor Ihnatiuk argues two things have changed: speed and privacy. Bitcoin acts as the settlement layer, while RGB keeps transaction details off the public blockchain. He claims Lightning payments can settle in around 100 milliseconds.

How RGB and Lightning Fit Together

RGB, in development since 2016, lets users issue and move assets through contracts tied to Bitcoin without publishing every detail on-chain. Participants validate transfers themselves, while cryptographic commitments anchored to Bitcoin provide security. It is neither a sidechain nor a rollup.

The protocol also works with Lightning, allowing USDT to move through payment channels without a base-layer transaction each time. Utexo believes confidentiality will appeal to businesses that dislike exposing their counterparties on a transparent ledger. The company says it can selectively disclose data for compliance and respond to law enforcement requests.

Bridge Risk Raises Questions

Utexo opened early access to its USDT Mint product on October 22, letting verified exchanges, wallets and market makers test minting and redemption on Bitcoin’s Signet network.

Getting existing tokens onto Bitcoin requires locking USDT0 on Arbitrum before an equivalent amount is minted on Bitcoin. Redemption reverses the process by burning the RGB asset. This means security depends on the bridge as well as Bitcoin and RGB, and bridges have historically attracted hackers.

Utexo’s goal is at least $1 billion in Bitcoin-based USDT within 12 months, with a median target of $5 billion and an ambitious ceiling of $10 billion. Whether demand materializes this time remains the key test.

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