Tether participated in a $7.5 million funding round for Utexo, a startup building infrastructure for USDT settlement directly on Bitcoin. The investment signals growing interest in using Bitcoin as a base layer for dollar-denominated payments.
The stablecoin issuer co-led the round announced Friday alongside other investors. Utexo is developing payment rails that allow Tether (USDT) transfers to settle natively on the Bitcoin network.
The technology also enables USDT transactions over the Lightning Network, a second-layer system designed to process faster and cheaper payments. According to the companies, the system supports atomic settlement and private transactions while maintaining security tied to Bitcoin’s base chain.
Can Bitcoin Become A Stablecoin Settlement Layer?
Utexo’s infrastructure is designed to make stablecoin payments on Bitcoin predictable and operationally simple. Payment fees are fixed and disclosed in advance, and settlement costs are paid directly in USDT.
The approach aims to address a long-standing limitation. While Bitcoin is the largest cryptocurrency network by market capitalization, most stablecoin activity currently occurs on programmable chains such as Ethereum or Tron.
Tether (USDT) remains the dominant dollar-pegged stablecoin with roughly $184 billion in supply, according to company data. If stablecoins begin settling directly on Bitcoin at scale, could the network evolve into a major global payment rail?
Tether CEO Paolo Ardoino said the investment aligns with the company’s long-term strategy.
“Bitcoin has always been central to Tether’s long-term vision for USDT,” Ardoino said in a statement. “By enabling native USDT settlement directly over Bitcoin and the Lightning Network, with predictable costs and seamless integration, it strengthens Bitcoin’s position as a global settlement rail for real-world dollar transactions.”
The deal also reflects Tether’s expanding investment strategy. The firm has become an active venture investor across sectors that support its stablecoin ecosystem.
Recent investments include LayerZero Labs, whose technology is being used to develop USDT0, an omnichain version of the stablecoin. Earlier this week, Tether also backed sleep-technology company Eight Sleep in a funding round that valued the startup at $1.5 billion.
If Utexo’s payment rails gain adoption, the development could shift how stablecoins interact with Bitcoin infrastructure. The next catalyst will be whether exchanges, payment providers, or fintech platforms integrate the new settlement system at scale.
