Stablecoins are coming to Bitcoin's Lightning Network

A new era is opening for Bitcoin. At the recent FT Live’s Crypto and Digital Assets Summit in London, Elizabeth Stark, CEO of Lightning Labs, revealed that her company was on the verge of enabling the issuance of stablecoins and tokenized assets directly on the network of the leading cryptocurrency.

The Lightning Network is gearing up to welcome Stablecoins

At the summit, the co-founder of Lightning Labs unveiled the latest advancements made by her company. This innovation will enable the native integration of stablecoins and tokenized assets on the Bitcoin network, through the Taproot upgrade.

“We have recently successfully demonstrated the very first native transaction of an asset on Lightning. Our goal is to enable the circulation of Crypto-Dollars and Stablecoins directly on Bitcoin,” said Elizabeth Stark.

Until now, these digital assets have mainly operated on other blockchains suffering from high fees and other issues. But according to Elizabeth Stark, the Bitcoin network is best positioned to facilitate the use of stablecoins, as it is “the most secure and decentralized blockchain”.

Lightning Labs is currently working on developing this infrastructure, which will allow financial institutions and asset issuers to offer stablecoins backed by fiat currencies, or even gold, on Bitcoin.

Bitcoin and Stablecoins, Prized Value Reserves

Elizabeth Stark also highlighted the strengths of Bitcoin and stablecoins as value reserves, especially valued in countries experiencing inflation and depreciation of their currency. Since the COVID-19 crisis, the adoption of stablecoins has soared, particularly in emerging markets.

“The most convinced users are those in search of a stable store of value. They turn either to Bitcoin or to stablecoins, or even combine both,” explains the leader.

But beyond this function as a store of value, stablecoins on Lightning offer a significant competitive advantage: transaction fees that are unbeatably low compared to traditional payment networks like Visa. “On Lightning, transaction fees in Stablecoins can go down to a cent or less,” emphasizes Elizabeth Stark. This could democratize cross-border payments at a low cost.

The imminent arrival of stablecoins at the heart of the Lightning Network represents a turning point in the evolution of the Bitcoin ecosystem. By bringing speed, scalability, and minimal fees, this innovation could catalyze the global adoption of cryptocurrencies and strengthen Bitcoin in its role as the digital value of reference.