In a significant move for cryptocurrency infrastructure, Tether Operations Limited and the venture capital arm of Gate.com, Gate Ventures, have made strategic investments into startup Utexo, which is building technology to enable stablecoin payments directly on the Bitcoin network. Tether co-led a $7.5 million funding round alongside other investors including Big Brain Holdings, Portal Ventures, and traditional finance giant Franklin Templeton.
The investment targets a critical infrastructure gap, aiming to integrate the world's largest stablecoin, USDT, with Bitcoin's security. Historically, stablecoin issuance and transaction activity have concentrated on smart-contract blockchains like Ethereum, while Bitcoin's transaction model lacked native, efficient support for such assets. Utexo's technology is designed to facilitate private, near-instant, and non-custodial stablecoin transactions anchored to Bitcoin.
Utexo's technical approach combines the RGB protocol—a client-side validation protocol for issuing and managing digital assets anchored to Bitcoin transactions—with the Lightning Network's payment channels. This architecture aims to improve scalability, privacy, and reduce transaction costs compared to conventional token standards, while allowing users to retain control of their funds without relying on custodial platforms.
The system is being built so that developers, wallets, and financial services can integrate Bitcoin-based stablecoin payments without operating complex node infrastructure themselves. Notably, settlement fees for transactions on this network will be payable in USDT itself, creating a circular economic model.
This development reflects a growing interest in expanding Bitcoin's role beyond a store of value toward broader financial infrastructure, often referred to as "Bitcoin Finance" or "Bitcoin DeFi." The participation of Franklin Templeton adds a layer of institutional validation to the venture. Gate Ventures stated its investment aligns with its strategy focusing on Bitcoin-native financial applications, stablecoin settlement networks, and scalable payment infrastructure.
