USDT returning to Bitcoin Network According to Tether CEO

[cryptoaddictchie]

So Tether decided to return on BTC Omni? The native chain where USDT resides before. Is this a good news or what could be the reason behind this?

“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.

It was tweeted by the Tether CEO last September 24 about this news and it seems the Tether back company UTEXO will handle the USDT issuance on bitcoin which says their primary goal is about privacy. Id still remember before I was able to use USDT on omnichain besides the erc20 supported USDT.

This is a lot to take in, when most users are already used to erc20 supported but probably this will make more convenient to BTC native holders since UTEXO planning to trimmed down fees as they wanted to extend it also on layer 2 network of bitcoin "Lightning".

Whats your thought on this?

[BlackBoss_]

So Tether decided to return on BTC Omni? The native chain where USDT resides before. Is this a good news or what could be the reason behind this?

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.

Yes, it is Omni, not Omi.

This is a lot to take in, when most users are already used to erc20 supported but probably this will make more convenient to BTC native holders since UTEXO planning to trimmed down fees as they wanted to extend it also on layer 2 network of bitcoin "Lightning".

Whats your thought on this?

Bitcoin transaction fees on chain have become cheaper than years ago and there are layer 2, side chains so if transaction fees are not longer big disadvantages, bringing USDT back to Bitcoin blockchain and its side chain is a very good decision. Bitcoin has biggest communities in cryptocurrency market and Tether will get good revenue by this approach.

Tron in recent years is no longer a good blockchain for transactions, if users care about transaction fees.
https://gasfeesnow.com/

Sidechain Observer - Bitcoin L2 Projects & current state of development.

[ABCbits]

Despite title of the news, it use utexo technology, where most activity actually happen on Lightning Network rather than Bitcoin on-chain.

How does it work under the hood?

Utexo combines two Bitcoin-native protocols: the Lightning Network for instant, off-chain payment execution, and RGB for issuing and transferring USDT with confidential, Bitcoin-anchored settlement. Execution happens off-chain for speed and scale; cryptographic commitments are anchored to Bitcoin’s base layer for correctness and finality.

It's still good news for Bitcoin ecosystem, since you can use USDT without totally leaving Bitcoin or Bitcoin network.

[PrivacyG]

which says their primary goal is about privacy

Tether and Privacy goals.  Thank you for the laugh!

[tbct_mt2]

which says their primary goal is about privacy

Tether and Privacy goals.  Thank you for the laugh!

Not only without privacy.

Tether can freeze people stablecoins in non custodial wallets, so they control user funds while users don't control anything. Even with non custodial wallets, users don't control funds.

PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets.
Can stablecoins be frozen?
Stablecoins frozen by issuers.

[PrivacyG]

Tether can freeze people stablecoins in non custodial wallets,

Tether is digital Fiat.  I am personally here particularly to avoid it and I believe the discussion should end there for every body.  If there were not so many people with SO much value held in it, I would hope every single day that by tomorrow their business and their Stable Coin are gone.

[Oshosondy]

Tether can freeze people stablecoins in non custodial wallets, so they control user funds while users don't control anything. Even with non custodial wallets, users don't control funds.

But have you seen anyone that complained that Tether freezed his USDT just like the common complaints that is very common to people using those centralized exchanges?

Yes, USDT is not a privacy coin, I completely agree with that part.

Tether is digital Fiat.  I am personally here particularly to avoid it and I believe the discussion should end there for every body.  If there were not so many people with SO much value held in it, I would hope every single day that by tomorrow their business and their Stable Coin are gone.

That is just it, even on this forum, many people are posting bad about it, but they are using it. Both USDT and USDC are very centralized, but people like using what is centralized from my findings. You can use exchanges to easily know that.

[Clearnet]

If we can cast aside the Privacy fact I think it's goo move for Bitcoin and it's native chain. A healthy volume can be added on the chain. On the other hand I am curious about what privacy they are looking for launching on bitcoin or it's native protocol.

[cryptoaddictchie]

Tether can freeze people stablecoins in non custodial wallets, so they control user funds while users don't control anything. Even with non custodial wallets, users don't control funds.

Good thing Tether got this feature somehow cause if not this Lawmaker who corrupted Billions of Pesos in Flood Control budget in the Philippines wouldnt be recovered by the Government. Yes its not good to have a control over funds. But when certain individual uses usdt for cases like this then its quite helpful.

many people are posting bad about it, but they are using it. Both USDT and USDC are very centralized, but people like using what is centralized from my findings. You can use exchanges to easily know that.

Thats true, Im not sure those who keeps saying bad stuff about Tether but still uses it somehow. Maybe only few of those who really dont uses that will disagree.

[EarnOnVictor]

Whats your thought on this?

You’re right, except for the Omni system remark. And it's good you asked a specific question about it.

What I read is that Tether is bringing USDT back to Bitcoin through Utexo, and your points about using the LN to make transfers faster and cheaper are accurate. But it's not via the old Omni system if you look closely. They’re now using RGB. This allows USDT to work with Bitcoin without putting all the transaction activities directly on the Bitcoin network.

[Danish Ali]

Despite title of the news, it use utexo technology, where most activity actually happen on Lightning Network rather than Bitcoin on-chain.

That seems correct, and I’d be curious to see other sources that confirm the same structure.

Here’s what Bitget (and others, e.g. Cryptonomist, Coincentral) say: “Tether/UTEXO is building on RGB protocol version v0.11.1, with UTEXO responsible for commercial issuance and distribution while. With the help of client-side validation and Lightning Network technology, RGB enables instant, low-cost, and private USDT transactions.”

So this is not a return to Omni-style USDT, it’s a whole new thing.

Tether can freeze people stablecoins in non custodial wallets, so they control user funds while users don't control anything.

Worth noting, USDT on Ethereum and Tron, for example, can be frozen. Which is what most would expect. But per Blockonomi’s article about the launch, it seems RGB assets exist against BTC UTXOs and therefore Utexo isn’t able to freeze RGB assets the way it could an ETH address, for example.

​If that holds up, this new USDT is more than just USDT on another chain, it is a departure from USDT as people know it (as a freezable asset) and could actually mean a change in the level of control that Tether has.

[Dogedegen]

Despite title of the news, it use utexo technology, where most activity actually happen on Lightning Network rather than Bitcoin on-chain.

How does it work under the hood?

Utexo combines two Bitcoin-native protocols: the Lightning Network for instant, off-chain payment execution, and RGB for issuing and transferring USDT with confidential, Bitcoin-anchored settlement. Execution happens off-chain for speed and scale; cryptographic commitments are anchored to Bitcoin’s base layer for correctness and finality.

It's still good news for Bitcoin ecosystem, since you can use USDT without totally leaving Bitcoin or Bitcoin network.

I have not heard of Utexo, but this makes sense for Tether. USDT on Bitcoin can not be competitive to USDT on shitcoin chains that are fast. We must remember and understand that people who are using USDT are not interested in so much decentralization and the censorship resistance at least not when they are using USDT. So actually the same token has to consider its own competitiveness across the offerings that it has on several chains, and in this case the speed of the transactions is very important. Only Lightning transactions can compete with the speed of USDT on other chains, and this has a chance to bring over some of those users. At least they would be using USDT on Lightning, which is much better than if they use USDT on something like Tron..

If we can cast aside the Privacy fact I think it's goo move for Bitcoin and it's native chain. A healthy volume can be added on the chain. On the other hand I am curious about what privacy they are looking for launching on bitcoin or it's native protocol.

Lightning transactions are more private than Bitcoin transactions on the first layer, I think this is what they meant with the comment about privacy? This USDT offering will actually be more private than using USDT on any other shitcoin chain!

[Darker45]

Tether can freeze people stablecoins in non custodial wallets, so they control user funds while users don't control anything.

Worth noting, USDT on Ethereum and Tron, for example, can be frozen. Which is what most would expect. But per Blockonomi’s article about the launch, it seems RGB assets exist against BTC UTXOs and therefore Utexo isn’t able to freeze RGB assets the way it could an ETH address, for example.

​If that holds up, this new USDT is more than just USDT on another chain, it is a departure from USDT as people know it (as a freezable asset) and could actually mean a change in the level of control that Tether has.

Not a complete departure, though. If what I've read is right, freezing isn't anymore possible with the new USDT setup, but it doesn't mean they're losing control.

In lieu of freezing, they now have blacklisting. That's a lesser evil, of course. Before, with Ethereum and Tron's blockchains, Tether could freeze entire wallets. Frozen addresses could neither receive nor send USDT. With blacklisting, what's locked is the specific UTXO. The rest of the wallet's unflagged funds could freely move.

Which means they remain as a controlling authority. Which means there isn't really much improvement.

[X-ray]

Not a complete departure, though. If what I've read is right, freezing isn't anymore possible with the new USDT setup, but it doesn't mean they're losing control.

In lieu of freezing, they now have blacklisting. That's a lesser evil, of course. Before, with Ethereum and Tron's blockchains, Tether could freeze entire wallets. Frozen addresses could neither receive nor send USDT. With blacklisting, what's locked is the specific UTXO. The rest of the wallet's unflagged funds could freely move.

Which means they remain as a controlling authority. Which means there isn't really much improvement.

I thought with how RGB works and the UTXO, technically the flagged USDT can still move freely? I hope I'm wrong but if somehow that's true and unlike blacklist on Ethereum and Tron where the USDT can't move, it's going to be another big problem for ordinary people who can easily get scammed by scammers who is selling UTXO blacklisted USDT that no exchange going to accept.

This is statement from Coindesk article

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.

They are basically going from blacklisting entire address to making the USDT unredeemable. It does feels like lesser evil to some extent, we're getting more private transactions and not complete freeze of USDT but the token still useless if blacklisted.

[Danish Ali]

In lieu of freezing, they now have blacklisting. That's a lesser evil, of course. Before, with Ethereum and Tron's blockchains, Tether could freeze entire wallets. Frozen addresses could neither receive nor send USDT. With blacklisting, what's locked is the specific UTXO. The rest of the wallet's unflagged funds could freely move.

This is far more relevant in the real world. In Ethereum/Tron, once an address is blacklisted, all the funds in that address are frozen, including legitimate funds sitting alongside illicit ones.

With UTXO level blacklisting, only the blacklisted UTXO is frozen while other legitimate funds in the wallet continue to operate as normal. This is a significant reduction in collateral damage even though Tether still has the ultimate power to blacklist a UTXO if they choose to.

Which means they remain as a controlling authority. Which means there isn't really much improvement.

I think its still an improvement though. Its still possible in theory but the cost of implementing it increases significantly. Instead of Tether just being able to freeze an address, they'd have to blacklist all of the outputs that could be associated with said bad actor. Which could get annoying when coin selection is taken into account.

Its an increased burden on them. Its not as simple as flipping one flag like it would be with an account based system.

[FinneysTrueVision]

They are basically going from blacklisting entire address to making the USDT unredeemable. It does feels like lesser evil to some extent, we're getting more private transactions and not complete freeze of USDT but the token still useless if blacklisted.

What happens when multiple USDT holders participate in the same coinjoin, some of them blacklisted and some not? Does it make the USDT fungible again or will they blacklist any UTXOs directly participating in coinjoins? These are interesting hypotheticals.

Tether has been teasing Bitcoin native USDT for the longest time, that I was beginning to think it was vaporware. I honestly don’t see this getting much adoption. Most exchanges and wallets haven’t implemented lightning and are even less likely to add support for a new token protocol.

USDT already has billions in market cap on other chains. There isn’t any incentive for those users to start using an entirely different ecosystem. I also see Tether having a hard time convincing Bitcoiners to use this.

[DaveF]

Having more diversified networks is probably good for them.
Also, there are some people who are not into crypto as a rule that do use stablecoins.
There are other people who are BTC and only BTC.
This *might* *possibly* *a little bit* let those people transact a bit.

Diversification of chains to send on is also good, but I just do not see a lot of people using it.

-Dave

[Donneski]

which says their primary goal is about privacy

Tether and Privacy goals.  Thank you for the laugh!

I joined you to have a good laugh as well because the Tether I know is widely known in the cryptocurrency community for not being privacy-focused. But on a serious note, I think this is more of a win for the Bitcoin ecosystem than just a move by Tether. It'll offer users the option of transferring USTD quickly and cheaply through Lightning which as a result gives them the practical reason to interact with Bitcoin without necessarily having to hold BTC itself. In addition to that it could also give Bitcoin more utility beyond just holding BTC.

[pooya87]

Well since it means injecting arbitrary data into bitcoin's blockchain (data that is not part of the Bitcoin protocol and is not enforced by it) that makes it a spam transaction in my book; therefore I don't like this news. But it is useful for people who want to use this centralized altcoin to transfer some funds around without needing to own altcoins (you need to pay fees on altcchains when moving tether) or altcoin wallets.

In addition to that it could also give Bitcoin more utility beyond just holding BTC.

Satoshi has already responded to this comment 16 years ago:

Piling every proof-of-work quorum system in the world into one dataset doesn't scale.

Bitcoin and BitDNS can be used separately.  Users shouldn't have to download all of both to use one or the other.  BitDNS users may not want to download everything the next several unrelated networks decide to pile in either.

Bitcoin already has a useful utility as a payment system, we don't need to pile every other utility into it. It doesn't scale and it only creates "clog".

[stompix]

Tron in recent years is no longer a good blockchain for transactions, if users care about transaction fees.

Tron is the perfect example where over complcaiting things and having a different currency for fees, designed to be just another gimmick with no actual impact other than headaches and expensive transfers for casual users will drive users away to other chains that are way mroe simplitic, who ever designed the "energy" stuff, probably trying to copy the gas on eth scrwed the network forever.

With UTXO level blacklisting, only the blacklisted UTXO is frozen while other legitimate funds in the wallet continue to operate as normal. This is a significant reduction in collateral damage even though Tether still has the ultimate power to blacklist a UTXO if they choose to.

It's still basically the same thing, once blacklisted the bridge is not valid anymore, you have the coins but they are unspendable over the network so they will not be able to get your coins but you can't use them either, the only thing they can't do a thing about is your actual Bitcoins.