Tether Plans to Re‑introduce USDT on Bitcoin with Utexo, Backed by Morgan Stanley Discussions

Utexo CEO Viktor Ihnatiuk met with Morgan Stanley in Washington to discuss the deployment of USDT on the Bitcoin network. The talks focused on how Utexo’s technology could support adoption of the stablecoin across Europe and globally.

Why USDT Is Returning to Bitcoin

USDT originally launched on Bitcoin via the Omni Layer in 2014 before most of its supply migrated to Ethereum and Tron. Tether ended support for the Omni version in 2023. The company now aims to bring USDT back to Bitcoin using the RGB protocol and Lightning Network, which keep transaction data off‑chain while enabling fast, low‑cost transfers.

Utexo’s Role and Recent Developments

Utexo builds the infrastructure that lets wallets, exchanges, and custodians move USDT over Lightning. It relies on RGB, a protocol for issuing assets on Bitcoin. Tether led a $7.5 million seed round for Utexo, joined by Big Brain Holdings, Portal Ventures, and Franklin Templeton. In August, Utexo added its RGB Lightning module to Tether’s Wallet Development Kit, a toolkit for self‑custody wallet developers.

Potential Launch Partner

Utexo has named UniSat, a wallet known for Bitcoin Ordinals and tokens, as its next launch partner. UniSat reports over one million weekly active users. Neither Utexo nor Tether has announced a specific release date for the Bitcoin‑based USDT product.

Broader Context

Morgan Stanley has expanded its crypto offerings this year, launching a spot Bitcoin ETF in April and opening E*Trade crypto trading in May. While the bank has not announced a formal partnership with Utexo, its interest underscores growing institutional attention to Bitcoin‑based stablecoins.

Challenges Ahead

Regulatory constraints in the EU’s MiCA framework have limited USDT’s reach in Europe, as Tether rejected a bank‑deposit rule. The upcoming UniSat rollout will provide the first real test of user demand for USDT on Bitcoin.