Tether announced on August 28 that its primary USDT stablecoin will now be issued directly onBitcoin using the RGB protocol.
This is the first instance of a prominent stablecoin being natively deployed on the Bitcoin network, rather than through sidechains or as wrapped assets.
Regarding this initiative, Tether CEO Paolo Ardoino stated:
“Bitcoin deserves a stablecoin that feels genuinely native, lightweight, private, and scalable. With RGB, USDT gains a robust new pathway on Bitcoin, underscoring our faith in Bitcoin as the cornerstone of a more liberated financial future.”
What is RGB?
RGB is a protocol for asset issuance designed to operate across Bitcoin and the Lightning Network.
Instead of storing token data on-chain, it attaches proofs to Bitcoin transactions while keeping information on user devices. This structure reduces blockchain congestion, enhances privacy, and enables rapid Lightning payments.
The RGB Association noted that its capabilities signify a transformation in Bitcoin’s function beyond just a store of value.
With RGB, the network can now accommodate stablecoins, tokenized assets, and programmable contracts without modifying consensus rules.
The protocol reached mainnet readiness earlier this year with version 0.11.1, enabling developers to create and manage tokenized assets without necessitating adjustments to Bitcoin’s base layer.
Why this matters
By anchoring its stablecoin to Bitcoin, Tether is essentially assessing whether the world’s most secure blockchain can function as the foundational layer for everyday digital transactions.
Given this, the stablecoin integration allows Bitcoin users to hold USDT and BTC in a single wallet, conduct private transactions that obscure balances, and use Lightning channels for instantaneous settlements.
Consequently, if wallet and merchant adoption increases, stablecoins on Bitcoin could transition from being an experiment to a vital component of its financial ecosystem.
For Tether, which boasts a market cap exceeding $170 billion and dominates small retail wallets, this could greatly enhance the integration of its assets within Bitcoin’s environment.
Significantly, early demonstrations have even showcased a live bridge transferring USDT from Ethereum to RGB, indicating cross-chain potential.
