Upcoming Stablecoins on Bitcoin, says Lightning Labs CEO

The development of stablecoins running on the Bitcoin blockchain is becoming closer to reality thanks to new functionality created by Lightning Labs. The company’s Taproot Assets protocol aims to bring stablecoins and tokenized assets to Bitcoin, utilizing the network’s Taproot upgrade. Elizabeth Stark, CEO of Lightning Labs, discussed these advancements at FT Live’s Crypto and Digital Assets summit in London, providing an explanation of Bitcoin and the Lightning Network to traditional finance players. Stark emphasized that Bitcoin’s network is well-suited for stablecoins due to its security and decentralization, contrasting with other blockchains that have high fees and other issues.

Stark also highlighted the value of Bitcoin and stablecoins as a store of value, particularly in countries dealing with inflation and devaluing fiat currencies. She noted the significant adoption of stablecoins during the COVID-19 pandemic, with users in emerging markets turning to stablecoins for stability. The CEO cited Tether and Circle as the two largest stablecoin players, noting that they hold more US Treasury bonds than major nations like Germany and South Korea. While stablecoin holders do not benefit from interest, those in countries facing hyperinflation or precarious economic situations choose stablecoins as a store of value.

Given the growth of the stablecoin market, Stark argued that there is a need for infrastructure that enables the issuance of stablecoins and real-world assets on the Bitcoin blockchain. Lightning Labs’ protocol aims to provide this infrastructure, allowing financial institutions to issue gold assets, stablecoins, and other fiat-backed assets on Bitcoin and transact through the Lightning Network. Stark highlighted the lower fees associated with transacting stablecoins on Lightning compared to other blockchains and traditional finance systems like Visa. This cost advantage could enable global transactions at significantly lower rates.

The Lightning Labs team has made progress in developing functionality to bring stablecoins and tokenized assets to the Bitcoin blockchain. CEO Elizabeth Stark emphasized Bitcoin’s suitability as a network for stablecoins due to its security and decentralization. She also discussed the growing adoption of stablecoins as a store of value, particularly in countries facing inflation and economic instability. Lightning Labs’ protocol aims to provide the infrastructure for issuing stablecoins and real-world assets on Bitcoin, enabling financial institutions to transact through the Lightning Network at lower fees compared to traditional systems.

Philis Zurita

Philis Zurita

3 thoughts on “Upcoming Stablecoins on Bitcoin, says Lightning Labs CEO

  1. The adoption of stablecoins during the pandemic was crucial, and Elizabeth Stark’s insights shed light on their benefits in economically unstable countries. Stability and security are paramount!

  2. Elizabeth Stark’s explanation of Bitcoin and the Lightning Network was incredibly informative. Thanks to her insights, traditional finance players now have a better understanding of the potential of cryptocurrencies. 💡💼

  3. The important role stablecoins played during the pandemic cannot be overlooked. Thanks to Elizabeth Stark’s insight, we now understand how stablecoins provided stability in emerging markets.

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