Tether Plans USDT Relaunch on Bitcoin via Utexo and RGB Protocol

Tether is returning its flagship stablecoin to the Bitcoin network. The relaunch, scheduled for October 2026, will be facilitated by an infrastructure project known as Utexo, which holds a commercial license from Tether to issue USDT on Bitcoin.

The project aims to provide private transfers, direct BTC-USDT swaps, and loans backed by native Bitcoin. Tether CEO Paolo Ardoino confirmed the move on X in September 2026.

Utexo, founded in 2025, raised $7.5 million in early 2026 to develop its infrastructure. The technical framework utilizes the RGB protocol and Bitcoin’s UTXO model. By employing client-side validation, the protocol allows parties to verify transaction data themselves, keeping most information off the public blockchain.

Regarding compliance, Utexo plans to implement a blacklist of specific UTXOs associated with illicit activity. This approach differs from account-based chains, as it targets individual transaction outputs rather than locking entire addresses.

The initial launch is slated for the Bitcoin mainnet, with support for the Lightning Network expected to follow. More than 450 businesses, including wallets and exchanges, have expressed early interest in the project. Potential discussions involving institutions such as Morgan Stanley have been mentioned, though these remain unconfirmed.

USDT originally launched on the Omni Layer on Bitcoin in 2014 before Tether shifted its primary issuance to Ethereum and Tron. Tether ceased Omni issuance in August 2023.

The integration of native BTC-USDT swaps and Bitcoin-backed loans could potentially reduce reliance on wrapped tokens like WBTC, which carry custodial and smart contract risks. The rollout will occur in stages, beginning with the mainnet launch.