Executive Summary

Utila now supports sponsored transfers for Bitcoin (BTC), Litecoin (LTC), and Bitcoin Cash (BCH). A sponsor wallet in the same vault pays the network fee, allowing the source wallet’s full balance to reach the destination without a fee deduction. Utila combines inputs from both wallets into a single transaction, with one signing flow covering both.

Funds, custodians, and lenders can use sponsored transfers for withdrawals, sweeps, consolidation, and collateral movements without maintaining fee reserves in wallets holding client assets. Transfers follow the source wallet’s existing transaction policies and approval flow, while each transaction record identifies the sponsor wallet and the fee charged for reconciliation. Sponsored transfers are available through the Utila console, mobile app, and API.

Separate Network Fees from Client Funds

When you hold Bitcoin for clients, every balance belongs to someone. A fund holds its investors’ BTC, a custodian holds its clients’ BTC, and a lender holds BTC posted as collateral. Each outgoing transfer also needs a miner fee paid in BTC, and that fee has to come from a balance somewhere.

Sponsored transfers on Utila now support UTXO chains. When you send BTC, LTC, BCH, or Doge, you can choose a different wallet in the same vault to pay the network fee. The full balance of the sending wallet moves to the destination, and the wallets holding client funds don’t need to keep a fee reserve.

The same sponsorship flow is already available on EVM chains, Solana, Sui and Aptos, so your operations team can manage fees on Bitcoin and its forks the way it already does on those networks.

Transaction Construction

A sponsored UTXO transfer is a single transaction with inputs from two wallets. When you start it, you choose the source wallet, the destination, and a sponsor wallet from the same vault. Utila then builds the transaction in three parts:

• Source inputs. The source wallet’s UTXOs are sent to the destination in full, with no fee deducted.

• Sponsor inputs. Utila automatically selects UTXOs from the sponsor wallet to cover the miner fee, and the sponsor’s change returns to the sponsor wallet.

• Signing. One signing flow covers the inputs from both wallets, with each wallet’s key signing its own inputs.

Utila locks the sponsor’s selected UTXOs as soon as you start the transfer. They stay unavailable to other transactions until this one is signed, broadcast, cancelled, or expires, so a second transfer can’t spend the UTXOs reserved for this fee. Your fee preferences apply to sponsored transfers as they do to any other transfer. If the sponsor wallet can’t cover the fee, you get a clear error when you start the transfer.

Policy and Approvals

Sponsorship doesn’t change who approves what. Transfers from the source wallet follow your transaction policy and approval flow as usual. 

Each transaction record shows the sponsor wallet and the fee charged to it, so your team can reconcile network fees against a single wallet.

Operational Impact for Asset Holders

For teams holding BTC for others, transfer amounts and client balances stay exact. If a client deposits 1 BTC, you can send back 1 BTC, and the client’s wallet balance changes only when the client’s funds move. Network fees come out of one sponsor wallet that you fund and monitor.

This applies to withdrawals, sweeps, and consolidation alike. You can sweep balances from many wallets with a single sponsor wallet, without funding fees in each one first.

Bitcoin Collateral in Lending

A US chartered bank running a Bitcoin backed lending platform on Utila holds each loan’s collateral in its own wallet. When a client repays, the bank returns exactly the amount the client posted. When a liquidation occurs, the bank moves exactly the collateral amount. In both cases, a sponsor wallet in the same vault pays the miner fee, so the collateral wallet only ever holds the client’s BTC.

Availability

Sponsored transfers for BTC, LTC, DOGE, and BCH are available in the Utila console, the mobile app, and the API. In the API, pass the sponsor field when you create an asset transfer. Fee estimation also accepts sponsor and returns the expected fee charged to the sponsor wallet. 

About Utila

Utila is a stablecoin and digital asset infrastructure platform for banks, fintechs, payment providers and enterprises. Institutions use Utila to build, manage and scale stablecoin payments, treasury, trading and tokenization operations on infrastructure they control. The platform combines institutional-grade MPC wallets, granular policy controls, robust APIs and multi-chain support with integrations across banking, compliance, exchanges, on/off-ramps and liquidity. Trusted by 400+ companies, Utila processes more than $30B in monthly volume and has facilitated over $500B in transactions to date.