USDT returns to Bitcoin via RGB, testing Tron’s dominance

Tether is bringing back its dollar-pegged stablecoin into the Bitcoin blockchain and this could change the way transactions are conducted in the most traded form of cryptocurrency. According to Tether transparency data, around 85% of the total supply of USDT exists on the TRON and Ethereum networks, thus making these two platforms the preferred settlement layers for the biggest stablecoin in the world. A version of Bitcoin running on the Lightning Network could give exchanges and traders another option for making payments while relying on the Bitcoin protocol for settlements.

The launch seems to be coming soon, and the support might come within this month of July, with Tether Wallet and several exchanges working on integrations. USDT will be issued using RGB v0.11.1, a Bitcoin asset protocol developed by the software firm UTEXO, which is serving as issuer and distributor in partnership with Tether.

USDT was launched for the first time on Bitcoin way back in the year 2014 using the Omni Layer, before transferring to Ethereum and Tron platforms, where lower fees and broader infrastructure helped it become the dominant network for stablecoin transfers. UTEXO’s co-founder Victor Ihnatiuk stated that the rollout of the RGB is one of the milestones in the Bitcoin story. “For the first time in eight years or nine years, USDT is coming back home,” he told Bitcoin Magazine. “We have no chance to fail. If we fail, no one will think about Bitcoin as a settlement layer anymore.”

RGB aims to combine Bitcoin security with Lightning speed

Tether’s recent move is an expansion of its return to Bitcoin as opposed to being a return to the network itself. Earlier in March 2026, Tether was able to complete the USDT rollout across Bitcoin via Lightning Labs’ Taproot Assets protocol. The integration makes it possible to carry out USDT transactions through the Lightning Network, making use of Bitcoin’s Taproot upgrade. The latter brought enhanced privacy, efficiency, and scripting capabilities, which allowed the development of more advanced asset protocols.

RGB is a different type of initiative from the one above. Instead of using Taproot Assets, the company would opt for issuing USDT through RGB v0.11.1, a new protocol created for Bitcoin-backed asset transactions.

According to the RGB Protocol Association, the RGB technology allows for the validation of transactions that happen off the blockchain itself and requires only a minimal cryptographic commitment for the settlement of transactions on Bitcoin. On the other hand, Taproot Assets lets users register asset commitments in the Taproot outputs. It was developed as a solution to work seamlessly with the Lightning Network. This group of proposed solutions represents an attempt to determine which framework is going to be favored for stablecoins and tokenized assets in the Bitcoin ecosystem at large.

RGB, just like Taproot Assets, will offer the advantages of Bitcoin’s security and Lightning’s fast transaction speed. It will minimize on-chain data writing since most validation processes will take place off-chain, thereby reducing congestion in the blockchain and helping the privacy of users. Users will also be able to hold USDT in their Bitcoin wallets and send it through Lightning-compatible wallets.

UTEXO co-founder Viktor Ihnatiuk believes the approach could simplify moving value on Bitcoin by eliminating the need to bridge assets across multiple blockchains. “With USDT and Bitcoin over Lightning, for the first time you have two main assets on one chain; you can swap instantly without any slippage,” he said.

RGB itself is no longer an experimental technology. Version 0.11.1 went live on Bitcoin mainnet in July 2025, providing the foundation for Tether’s planned deployment.

Ecosystem support will determine success

The commercial ecosystem linked to the project has grown continuously over the years. UTEXO was created as a result of a partnership between Boosty Venture Studio, Fulgur Ventures and Tether Investments and recently raised $7.5 million in investments led by Tether and BigBrain VC and Portal Ventures to prove the support of institutions for RGB development as one of the pathways for Bitcoin-native assets.

There are many other companies that are also doing the same things with this method of operating on Bitcoin. In April, Solv Protocol worked with UTEXO to implement Bitcoin-native yield strategies based on direct Bitcoin-to-USDT transactions.  They also integrated their settlement layer with the x402 payment protocol, allowing for machine-to-machine USDT payments at a lightning-fast pace of 50 milliseconds.

According to independent analysts, protocol choice is not everything. Galaxy Research’s review of Tether’s Taproot Assets initiative outlined how bringing USDT back to the Bitcoin blockchain illustrates the growing versatility of Bitcoin beyond being just “digital gold” into a platform for payments, decentralized finance, or tokenized assets. Still, the firm warned that it will be an uphill battle to compete with Tron, given the established payment infrastructure and liquidity of its network. This assessment means that in order for Bitcoin to be successful, there needs to be widespread adoption of the coin among wallets, exchanges, and other payment facilitators.

Meanwhile, Lightning adoption is continuing to rise. According to River Financial, the Bitcoin Lightning Network handled an estimated $1.17 billion in transaction volume across 5.22 million payments in November 2025, becoming the first time the network crossed the $1 billion monthly mark. Blockonomi noted that Secure Digital Market did a transfer via Lightning on Kraken that amounted to $1 million within 0.43 seconds in January 2026.

The potential erosion of Tron’s supremacy by Bitcoin-native USDT will hinge more on the adoption of the ecosystem than on the design of protocols. The eventual decision of users to make the switch to the Bitcoin-based settlement protocol will depend on how well the USDT manages to attract exchanges to list it, wallets to support it and payment systems to embrace it. The issuance of USDT is carried out by Tether in a centralized fashion regardless of the underlying blockchain platform. What changes this time is the layer of settlement, with Bitcoin being in a position to take the mantle for the first time in nearly a decade.

Tether is preparing to issue USDT natively on Bitcoin through the RGB protocol, deployed by UTEXO, with a launch expected as soon as July 2026. It matters to exchanges, payment firms and traders because roughly 92% of USDT now lives on Ethereum and Tron, and a Lightning-based Bitcoin version offers a private, fixed-cost alternative. The move is Tether’s bid to reclaim settlement volume on the network where USDT first launched in 2014.