Tether CEO Paolo Ardoino has renewed attention on plans to make USDT widely usable through Bitcoin, confirming that the stablecoin is 'coming home' to the network where it first launched in 2014. Tether first announced its return to Bitcoin in January 2025, while companies developing the necessary payment infrastructure have worked on the rollout throughout 2026. USDT was initially issued on Bitcoin via the Omni Layer protocol, but a majority of its activity has migrated to other networks such as Ethereum and Tron due to lower and quicker transfer fees. As reported by AMBCrypto, Tether ended offering direct support to the older Omni version but is now looking for ways to bring back USDT to Bitcoin. The renewed push leverages Utexo's RGB Lightning module, which was added to Tether's Wallet Development Kit (WDK) in August, allowing wallets, exchanges, and custodians to move USDT over the Lightning Network while keeping transaction data off-chain.
Utexo co-founder Viktor Ihnatiuk said he recently met Morgan Stanley representatives in Washington to discuss USDT adoption through Bitcoin, with Tether CEO Paolo Ardoino resharing the announcement, stating that USDT is 'coming home' to Bitcoin. However, as of now, Morgan Stanley has not publicized its association with Utexo or Tether, and there is no timetable which clearly shows when the two mentioned products will be available to customers. According to AMBCrypto, Ardoino's remarks therefore confirm that the move is ongoing support, not that the announcement is a new project from Tether. Utexo raised $7.5 million in March to build such infrastructure where business owners can send USDT over Bitcoin, using RGB technology that allows tokens to move with Bitcoin without placing every piece of information directly on the public blockchain.
Tether has confirmed minimal exposure to EQIBank following the U.S. asset seizure, stating that its assets held at the Dominica-licensed lender represent less than 0.034% of its total assets. According to CoinDesk, Tether said its exposure to EQIBank amounts to less than 0.034% of its total assets, though the company did not disclose the exact dollar amount. Based on Tether's reported $187.75 billion in assets at June 30, 2026, the percentage exposure would put the EQIBank risk at roughly $64 million. EQIBank provided banking services to Tether, including processing wire transfers linked to purchases and redemptions of USDT, but the disclosure does not suggest an immediate threat to USDT's reserves or dollar peg. U.S. prosecutors seized money from Capstone accounts and filed a civil forfeiture case, alleging that Capstone misrepresented its business to banks, with EQIBank saying roughly $89 million was seized, equal to about 80% of its monetary holdings, putting the lender at risk of liquidation.
The European Central Bank and 27 EU central banks have filed comprehensive comments with the European Commission urging replacement of MiCA's 30% and 60% bank-deposit floors with maturity-based liquidity requirements. According to the 57-page response filed by the European System of Central Banks (ESCB), the group continues to support the prohibition on crypto-asset service providers (CASPs) paying remuneration on stablecoins, but now seeks to extend this ban beyond current MiCA regulations. More than two years before the ESCB response, Tether CEO Paolo Ardoino warned about the same reserve structure in 2024, using a hypothetical €10 billion stablecoin to explain his concerns about uninsured deposits. As reported by Reuters, Ardoino argued that under the 60% requirement, an issuer would need to place €6 billion with banks, creating a situation where both the bank and stablecoin could fail if token holders request large redemptions. The new proposal shows that Tether was right on one disputed part of MiCA, but what it does not do is translate to a wider regulatory victory.
The ESCB wants EU lawmakers to make clear that the stablecoin remuneration ban cannot be bypassed through structured products. As reported by crypto.news, the central banks warned that crypto platforms could structure products outside MiCA that effectively turn stablecoin holdings into yield-bearing arrangements. The ESCB noted that stablecoins can be 'transformed into yield-bearing arrangements through lending, staking or other layered structures,' providing holders with economic returns even when the stablecoin itself does not directly pay interest. Such arrangements could weaken the regulatory distinction between electronic money and bank deposits while creating unequal conditions between crypto companies and regulated financial institutions. The group emphasized that 'maintaining and, where necessary, strengthening the prohibition, covering both direct and indirect forms of remuneration, should be a clear legislative priority.'
The central banks propose replacing MiCA's current reserve requirements with liquidity rules based on conversion speed to cash. Under the proposed changes, stablecoin issuers would hold specified portions of reserves maturing in 1-5 working days rather than maintaining deposits at credit institutions. The ESCB noted that large stablecoin deposits can become an unstable source of bank funding, leaving lenders exposed if an issuer needs to withdraw funds quickly to meet redemptions. The proposal aligns with draft European Banking Authority standards, which require significant stablecoins to hold at least 40% of reserves in assets maturing within one day and 60% within five working days, while non-significant stablecoins would require 20% and 30% respectively. The framework covers cash and other reserve assets according to how quickly they can mature to meet redemption demands. The central banks warn that forcing issuers to hold large bank deposits could create another source of financial risk, as if customers decide to cash their stablecoin holdings, the company will also need to withdraw billions from their banks.
Tether's latest financial disclosures provide additional context for the EQIBank exposure. Tether reported $187.75 billion in assets at June 30, 2026, with liabilities at around $183.64 billion and excess reserves at $4.11 billion. The company's USDT issuance stood near $184.6 billion at quarter-end, with reserves remaining concentrated in short-duration and liquid assets including U.S. Treasury-related holdings and repurchase agreements. As reported by crypto.news, Tether generated roughly $1.5 billion in second-quarter operating profit while its excess reserve balance ended June at $4.11 billion, though this was down from $8.23 billion at the end of the first quarter. The company completed its first full independent financial statement audit in August 2025, with KPMG U.S. issuing an unqualified opinion on audited financial statements covering the year ended December 31, 2025. The audit showed reserves exceeding liabilities tied to issued tokens by $6.814 billion at year-end, with KPMG examining transactions, asset ownership, valuations, counterparties, internal systems and supporting documentation while physically inspecting Tether's gold holdings.
The position that Tether holds makes it difficult to ignore in the discussion, as CoinGecko data shows that USDT's market value is around ₹1,53,000 crore ($184 billion), which is about 63% of the roughly ₹4,70,000 crore ($292 billion) stablecoin market. As a result of its size, any rule affecting USDT can influence liquidity across the wider crypto market, even when the token is not authorized for regulated EU distribution. The ESCB remains concerned about stablecoins issued across several regions but treated as interchangeable, with European authorities feeling this will allow redemption from outside the EU, which can drain reserves held in these countries. The litigation remains active, with EQIBank maintaining that it is an innocent owner of the money and warning that losing access could place it at risk of liquidation. The next procedural steps sit in the Eastern District of California forfeiture case, with the September publication order giving parties claiming an interest in the seized property up to 60 days to file claims.
