Tether Wants to Issue USDT on Bitcoin Network, Is "Old Trick, New Look" Targeting TRON?
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Tether Wants to Issue USDT on Bitcoin Network, Is "Old Trick, New Look" Targeting TRON?
Tron Has Collected Toll Fees via USDT for Nine Years—Is Tether Now Planning to Collect Them Directly?
Navigating Web3 tides with focused insightsAuthor: Bitcoin Magazine
Compiled by: TechFlow
TechFlow Editor's Note: USDT is being re-issued natively on Bitcoin via the RGB protocol, marking the first true return since 2014. The new solution supports instant settlement on the Lightning Network and the native privacy protection of the UTXO model, with fees and slippage far lower than public chains like Tron. If successful, it could rewrite the stablecoin landscape. Their logic is, since the main capital in the crypto market is in Bitcoin and USDT, why take a detour to buy TRX to pay fees?
Tether is preparing to natively issue USDT on Bitcoin via RGB protocol version v0.11.1. Deployed by UTEXO Software Labs, USDT will return to the chain where it was first issued via the Omni-Mastercoin layer in 2014.
UTEXO is the company leading this commercial deployment, positioning itself as the issuer and distributor of this Bitcoin-native USDT in collaboration with Tether. "After eight years or even longer of development, we have finally become the company issuing USDT on Bitcoin with strong support from Tether," UTEXO co-founder Viktor Ihnatiuk said in an exclusive interview with Bitcoin Magazine.
The RGB protocol combines its unique client-side validation with the Lightning Network to achieve instant, private settlement, while anchoring security to Bitcoin's UTXO model. Users can handle USDT on Bitcoin native addresses and send/receive on the Lightning Network via compatible wallets.
The RGB protocol on Bitcoin also provides important privacy features for USDT users, as the asset benefits from Bitcoin's UTXO model—this model standardizes the use of new addresses for every transaction, unlike the account model common to EVM blockchains like Tron, Ethereum, or Solana which reuse addresses. Address reuse is the biggest mistake for on-chain privacy, but most altcoins still build interfaces that reuse addresses, despite the risk this brings to users. The integration of RGB with the Lightning Network further protects user privacy by moving USDT through an off-chain payment network, leaving almost no trace on the public blockchain. Deep integration with Tether also means fewer intermediaries collecting extra fees or data.
On this topic, Viktor emphasized: "We built UTEXO to allow USDT to flow on Bitcoin the way money should: instant, private, no surprise costs. Our partners only need to integrate the API once to route USDT on the most resilient open network in history and have full control over the cost structure."
UTEXO vs. Tron
UTEXO originates from a joint venture of Viktor's Boosty Venture Studio, Fulgur Ventures, and Tether Investments. The goal is straightforward: to push RGB to mainnet after years of delays by previous development teams. The protocol has been in active development since at least 2016, but failed to catch the 2017 bull market, resulting in the Tron blockchain dominating USDT trading volume and usage in developing countries, a dominance that persists to this day.
UTEXO specifically built the "last mile" software needed for widespread deployment of USDT in the Bitcoin ecosystem, including SDKs, APIs, middleware protocols, UI design work, and even the minting bridge launched today at mint.utexo.com. This bridge allows users to move USDT between popular blockchains with "deterministic low fees" and no intermediaries, thanks to its direct integration with Tether as the primary minter. The RGB protocol layer was developed by Bitfinex Research Strategist Federico Tenga.
"Now if you want to swap USDT for Bitcoin, you need to pay high fees for all these wallets—they charge a 1% wallet fee, plus over 1% fee from the exchange provider, plus 1% slippage, so you pay 3%, and you have to wait a long time to complete the swap," Viktor told Bitcoin Magazine, adding: "With USDT and Bitcoin on the Lightning Network, for the first time you have two major assets on one chain, capable of instant swaps with no slippage. You can decentralizedly swap USDT for Bitcoin and back on-chain. The price is almost the same as Binance's spot market."
Networks mainly used for transferring USDT like Tron also add extra fees, exchange commissions, and friction to the user experience. They require different address types and use assets like TRX to pay fees, while TRX is only used to transfer stablecoins. Since most of the currency volume in the crypto market is concentrated in Bitcoin and Tether, having to buy altcoins to pay fees ultimately feels like red tape.
Bitcoin as a payment rail for USDT also brings blockchain-level security that other chains cannot provide. Although USDT as Tether company is fundamentally centralized, the rail also adds risk, for example if a contentious fork occurs or major vulnerabilities are discovered on novel blockchain systems. Bitcoin as the oldest, most conservative blockchain provides a quality assurance that other chains cannot match.
The roots of RGB can be traced back to the Single Use Seals proposed by Peter Todd in 2014, and formalized in 2016 by Giacomo Zucco and Riccardo Casatta. The abbreviation RGB originally stemmed from "Riccardo Giacomo Bitcoin", later renamed to "Really Good Bitcoin". Tether explored the protocol early on, but was hindered by delays from the previous team. If RGB had been delivered as planned around 2019, the stablecoin landscape and the broader DeFi industry might have developed around Bitcoin's UTXO model rather than Ethereum's account model.
Therefore, bringing USDT back to Bitcoin is UTEXO's core motivation. Viktor was blunt about this: "For the first time in eight or nine years, USDT is coming home. We have no chance to fail. If we fail, no one will ever treat Bitcoin as a settlement layer again."
USDT issued on Bitcoin via RGB is expected to launch within a few weeks, possibly this July, with wallets including Tether Wallet announcing support, and global exchanges also announcing integration.
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