“It’s coming home,” Tether CEO Paolo Ardoino proclaimed on X last week, referring to the return of his company’s stablecoin, USDT, to the Bitcoin network.

Tether’s USDT, the world’s largest stablecoin with a market cap of nearly $190 billion, began life on Bitcoin in 2014 on its Omi protocol, before Ethereum and later Tron became its primary venues.

USDT is now set to return to the world’s oldest blockchain through Tether-backed infrastructure project Utexo, which is expected to begin issuing the world's largest stablecoin on the Bitcoin network this month.

Utexo, which was founded in 2025 and raised $7.5 million in funding earlier this year, has been granted the commercial license to issue USDT on Bitcoin, using the stablecoin’s trademark to bring it to exchanges, wallets and payment providers, Utexo co-founder Viktor Ihnatiuk told CoinDesk in a Telegram message.

“Tether has always been a Bitcoin company,” Ihnatiuk told CoinDesk in a recent interview. “Bitcoin for them is a stability haven, along with gold. That’s why Tether kept buying BTC and supporting the Bitcoin community.”

Tether holds around 100,000 BTC ($8.4 billion) as of mid-August this year, according to Bitcoin Treasuries.

“I can’t speak for Tether directly, but my personal observation is that Bitcoin is a big priority for them, and it’s our job to make USDT as accessible on Bitcoin as it is everywhere else,” Ihnatiuk added.

Privacy twist

Utexo’s aims to accomplish this by creating an architecture for the stablecoin that is more confidential than its equivalent on Ethereum or Tron.

Its RGB protocol will employ client-site validation to keep transaction data largely off Bitcoin’s public ledger, with ownership anchored in unspent transaction outputs (UTXOs), the chunks of bitcoin left over from transactions, similar to change from a cash purchase.

While networks like Ethereum and Tron rely on account-based models that share balance updates and transactions on public ledgers, Utexo’s architecture takes a different approach. Combining RGB’s client-side validation with Bitcoin’s UTXO model means transaction details stay entirely off-chain between the counterparties involved, using Bitcoin’s ledger solely to cryptographically demonstrate proof of ownership.

Utexo will issue USDT on Bitcoin, providing the infrastructure for exchanges, wallet providers and payment companies to offer services through APIs, SDKs and cloud.

There are three primary use cases, according to Utexo: private USDT transfers; direct swaps between native BTC and USDT without routing through an exchange; and lending, in which borrowers can use native bitcoin as collateral without wrapping it on another blockchain (as is the case with tokens like WBTC).

The privacy use case comes with an important qualification.

RGB assets ultimately sit against Bitcoin UTXOs, meaning Utexo cannot technically freeze one in the same manner that Tether can freeze an Ethereum address. Instead, Utexo would maintain a blacklist of UTXOs associated with sanctioned or illicit activity and distribute that information to exchanges and other providers.

“The UTXO will just become unredeemable, so nobody would be able to send it back to a bridge or minting tool or withdraw it to Ethereum or Tron,” Ihnatiuk said.

Once USDT issuance is live on Bitcoin next month, Utexo’s next step will be to extend to Lightning, the layer-2 network designed to enable faster, cheaper payments on Bitcoin.

The goal there may be to make USDT a token for paying fees (or gas) on Lightning, similar to how USDC, the second-largest stablecoin, is being used on Arc, the new blockchain network developed by USDC issuer Circle.