During this month of October, USDT is due to make its return to Bitcoin, thanks to Utexo, an infrastructure supported by Tether and built around the RGB protocol. Thanks to this launch, confidential transfers, direct exchanges between BTC and USDT as well as loans guaranteed by native bitcoin will be possible, without the exposure of all operators on the public blockchain.
In brief
- USDT is due to make its return to Bitcoin in October thanks to Utexo and the RGB protocol.
- This infrastructure aims for more confidential transfers, direct BTC-USDT exchanges and collateralized bitcoin loans.
- RGB keeps most of the data off-chain and limits its exposure on the public blockchain.
- Utexo targets exchanges, wallets and payment providers in particular.
- The Lightning Network must be integrated in a second phase, without a precise timetable at the moment.
USDT return to Bitcoin gears up for October
Utexo plans to begin issuing USDT on Bitcoin this October. The company claims to have obtained a commercial license that allows it to use the Tether brand and offer this new infrastructure to exchanges, wallets and payment providers.
However, no precise date has yet been communicated. This deployment is therefore expected during the month, however it should not be presented as a service already accessible to all users.
Such a new version must notably offer:
- More confidential USDT transfers;
- Direct exchanges between native bitcoin and USDT;
- Loans secured by non-tokenized bitcoin;
- An integration intended for exchanges and wallets;
- A further expansion to the Lightning Network.
Paolo Ardoino, the boss of Tether declared :
USDT on Bitcoin. He comes home.
For his part, Viktor Ihnatiuk, co-founder of Utexo, explains that the objective is to make USDT as accessible on Bitcoin as it already is on other blockchains.
With a valuation close to $190 billion, USDT remains the leading stablecoin on the market. Its launch on Bitcoin would therefore broaden the uses of the network beyond the storage and transfer of BTC.
USDT on Bitcoin will use the RGB protocol
For this launch, it is not a question of inserting all USDT transactions directly into each Bitcoin block. Utexo is based on RGB, a protocol that uses Bitcoin to prove ownership of assets while keeping all data between participants.
RGB relies on client-level validation. Each user must verify the information necessary for a transaction without requiring all Bitcoin nodes to store their entire history. The network is used in particular to anchor cryptographic proof relating to unspent units of bitcoin, called UTXO.
Such an architecture is different from how USDT works on Ethereum or Tron. On these blockchains, balances and transfers appear in a public account-based ledger. With RGB, the details of a transaction remain largely off-chain and are only disclosed between the parties involved.
However, confidentiality should depend on the applications used and their implementation. It should therefore not be confused with absolute anonymity.
Three intended uses for USDT on Bitcoin
Three services are highlighted by Utexo. The first relates to private payments in stablecoins. In fact, users would transfer digital dollars without disclosing their balance and all of their transactions in a register visible to all.
The second use concerns direct exchanges between BTC and USDT. A person would convert native bitcoins to stablecoins without going through a wrapped bitcoin on another blockchain. This solution could reduce certain risks linked to bridges and custodians whose role is to guarantee tokens like WBTC.
The third service relates to credit. Thus, borrowers would deposit native bitcoin as collateral in order to obtain liquidity in USDT. Utexo primarily targets custodians, wallets, payment providers and companies that manage large volumes.
The Lightning Network must intervene in a second phase. It should therefore allow faster and less expensive payments than those settled automatically on the main layer of Bitcoin. However, Utexo has not announced a strict timetable for this expansion.
A new start after the abandonment of Omni
The expression “return home” refers to the history of Tether. USDT was launched in 2014 on Omni Layer, a protocol built on top of Bitcoin. Then, Ethereum and then Tron became its main infrastructures, due to lower costs and better integration with exchanges.
Tether stopped supporting USDT on Omni in 2023. The stablecoin is therefore not returning after ten years of absence. Instead, it returns to its original network more than ten years after its creation, with another technology.
This new model calls for compliance. Utexo will not be able to freeze a UTXO like Tether blocks an address on Ethereum. The company instead plans to draw up a blacklist of units linked to sanctions or illicit activities. Therefore, exchange platforms and other operators will then have to refuse their conversion or withdrawal.
“Bitcoin deserves a truly native, lightweight, private and scalable stablecoin”declared Paolo Ardoino during the initial announcement of the RGB project. The success of the launch will now depend on the number of wallets and exchanges that will actually integrate this new version of USDT.
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