Bitfinex’s CTO Paolo Ardoino Backs RGB Protocol for Bitcoin Stablecoins

Paolo Ardoino, the Chief Technology Officer at the cryptocurrency exchange Bitfinex, has thrown his support behind the RGB protocol as the “best opportunity” for issuing stablecoins on the Bitcoin blockchain. 

This endorsement from Ardoino shows the growing importance of RGB as a smart contract system and off-chain protocol, particularly in the wake of Tether’s discontinuation of its use for issuing USDT stablecoins.

Ardoino sees RGB as the “rightful successor” to Omni, a layer previously used by Tether to issue stablecoins on Bitcoin. Ardoino explained: 

“With regard to Omni, we believe RGB actually represents the best opportunity to have a modern, scalable, client-side smart contract system that allows tokens on Bitcoin.”

He went on to note that many prominent figures in the Bitcoin community also support RGB, and he believes it possesses all the necessary components to succeed Omni.

What Is RGB?

RGB is a smart contracts system and off-chain protocol designed for Bitcoin and the Lightning Network. It provides the infrastructure for minting and issuing Bitcoin-based digital assets. 

The concept of RGB was initially envisioned in 2016 by Giacomo Zucco, a Bitcoin educator, as a “non-blockchain based asset system.” This innovative approach to digital assets leverages ideas from Bitcoin Core developer Peter Todd.

Omni’s Decline

Omni, which was previously the choice for issuing stablecoins, had its heyday in 2014 when Tether adopted it. Over the years, it enabled Tether to issue USDT stablecoins on the Bitcoin blockchain. 

However, as usage dwindled and demand for stablecoins on Ethereum and Tron surged, Tether decided to discontinue support for Omni in August.

Ardoino acknowledged Omni’s decline, saying:

“Unfortunately, Omni suffered from a recent lack of support that impaired its ability to sustainably develop.”

While Tether has stopped minting USDT on Omni, users still have the opportunity to redeem tokens or exchange them on other blockchains for several months.

Ardoino revealed that Tether is currently evaluating a timeline for the possible issuance of USDT over the RGB protocol. Tether is actively involved in the development of the RGB protocol and has previously indicated its intention to resume issuing the stablecoin on the Bitcoin blockchain using RGB.

It’s worth noting that developer Lightning Labs has also released a similar solution to RGB called “Taproot Assets.” This new offering is initially available on Bitcoin, with Lightning Network support expected to follow.

Notably, Paolo Ardoino holds positions at both Bitfinex and Tether. Recently, he was promoted to the role of CEO at Tether while continuing to serve as the CTO at Bitfinex.