Tether plans Bitcoin USDT issuance amid Senate sanctions probe

Tether is reportedly preparing to issue its USDT stablecoin on the Bitcoin network using the RGB protocol, with a potential launch as early as October. This move aims to utilize Bitcoin’s base layer for stablecoin settlement, supporting features such as private transfers, direct Bitcoin-to-USDT swaps, and loans collateralized by Bitcoin. Most transaction data would remain off Bitcoin’s public ledger to preserve privacy.

Separately, a U.S. Senate investigation has identified Tether’s USDT as a primary tool used by sanctioned entities. The Senate Permanent Subcommittee on Investigations found that 84% of 846 cryptocurrency wallets linked to Iran and its regional proxies had transacted almost exclusively in USDT. Investigators described the activity as part of an Iranian “shadow banking” system used to move funds across borders. While the report does not claim Tether intentionally facilitated sanctions evasion, it raises questions regarding the effectiveness of the company’s compliance controls and the timing of fund freezes.