Paolo Ardoino retweeted a post from UTEXO co-founder Viktor Ignatychuk, simply stating "USDT on Bitcoin. It's coming home." Ignatychuk described a dinner in Washington with representatives from Morgan Stanley, discussing promoting the adoption of USDT on Bitcoin, covering Europe and other regions. The bank has not yet released a product announcement.

The technical path involves the RGB protocol combined with UTEXO issuance, connecting to wallets and exchanges, and utilizing Lightning for cheaper transfers. Tether had previously stated in January 2025 that it would use USDT on Bitcoin and the Lightning Network, with a report in July indicating an upcoming launch. USDT originally existed on the Omni layer, later migrating liquidity to Tron and Ethereum; "coming home" refers to settling the largest stablecoin back on the Bitcoin script layer, rather than creating a new Tether chain. Ardoino denied the creation of a separate chain last month.

There is a regulatory gap. Tether has not applied for a MiCA license, and starting July 1, 2026, USDT will be delisted from EU-regulated trading platforms. The Washington dinner identified Europe as a target market, but the implementation framework was not specified. On the same day, Circle integrated USDC and CCTP into the Bitcoin financial layer through Alpen, with both dollar stablecoins competing for Bitcoin-side lending and payment scenarios.

The circulating supply remains primarily on Tron and Ethereum; if Bitcoin-native USDT only exists on the RGB client, its depth depends on whether exchanges enable deposits and withdrawals and market making. If Morgan Stanley only stays in exploration, the narrative is stronger than the pipeline. Lightning channels can reduce transfer fees but cannot automatically achieve the liquidity levels of Tron.

In market mechanics, what is sold is the dollar balance on Bitcoin addresses, and what is bought is RGB issuance and Lightning routing. Demand comes from holders and payment providers wanting to hold dollars without leaving Bitcoin, while supply comes from Tether minting. Beneficiaries are Tether and UTEXO, which can collect issuance and transfer fees, while those under pressure are USDT liquidity providers on Tron and EU platforms that have not yet connected. Funds are mapped from dollar reserves to Bitcoin UTXO RGB assets, then completed through Lightning for small movements.

Source: Public Information