It All Comes Back to Bitcoin: How Stablecoins on Lightning Will Bring Exponential Growth 💸🤝⚡

Welcome to the latest edition of the Lightning Lab 🧪 newsletter! The new year has started off with a bang as Tether announced they are bringing USDT to bitcoin, providing the opportunity to bring hundreds of millions of users and trillions of dollars of stablecoin volume to bitcoin and Lightning. We cover how the community is making a multi-asset Lightning Network more accessible, more usable, and more powerful as the global, interoperable Layer 2.

On January 30, Lightning Labs CEO Elizabeth Stark and Tether CEO Paolo Ardoino announced that Tether is bringing USDT to bitcoin, with both on-chain transactions and Lightning Network support, at the Plan B El Salvador conference. This announcement will enable Tether to tap into the security and decentralization of the bitcoin blockchain together with the speed and scalability of Lightning, bringing the world's most popular stablecoin to bitcoin. Powered by the Taproot Assets protocol developed by Lightning Labs with contributions from the open source community, this integration makes use of the recent Taproot upgrade to bitcoin, and continues Tether's commitment to unstoppable technology. Tether’s recap of the conference called the news “a highlight of the forum”.

The reception to this announcement was incredible, with outlets like Zerohedge, Techmeme, Forbes, Bitcoin Magazine, Coindesk, The Block, and Decrypt providing coverage. Even Paris Hilton chimed in!

The global bitcoin community was particularly excited about the release, with posts in languages such as Spanish, Chinese, Portuguese, French, German, Japanese, and Italian. This comes as no surprise given Tether’s hundreds of millions of users worldwide. As CEO Elizabeth Stark stated:

“Today marks a new era for stablecoins. Bringing USDt to Bitcoin combines the security and decentralization of Bitcoin with the speed and scalability of Lightning. Millions of people will now be able to use the most open, secure blockchain to send dollars globally. It all comes back to Bitcoin.”

Once USDT is fully integrated with the Lightning Network, users worldwide will be able to make cross-border payments that settle instantly and at a fraction of the cost of other networks. The coming wave of AI agent transactions will be powered by USDT on Lightning, as machines pay machines with instant, high volume transactions. Finally, this integration will foster new financial products within bitcoin’s growing Defi and tokenization ecosystem, including new computation platforms, lending, trading, and financial assets on chain. Stablecoins on Lightning have been the most requested feature from the developer community over the last several years, and today’s announcement will make it a reality.

Adoption of USDT across the Lightning Network will happen faster than most expect. The Lightning community is filled with companies like Voltage that already support everything needed for a USDT integration today, and those like Bitpay who are committing to day one USDT on LN support. Read on to learn more about how the combination of the world’s most popular stablecoin and the world’s best payments network is poised to explode…

Joltz launched their self-custodial mobile wallet for Taproot Assets right after Tether announced they were coming to bitcoin, great timing! They had also previously helped Eulen issue the first native stablecoin on Taproot Assets: DePix, a tokenized Brazilian Real.

Bitso launched LN support for 8M+ users in Argentina 🇦🇷, Brazil 🇧🇷, Colombia 🇨🇴, and Mexico 🇲🇽. USDT on LN will be a big hit amongst their users!

Ark Labs raised a $2.5M pre-seed round to build a new wallet based on the Ark concept designed for fast, low-cost Bitcoin transactions over Lightning.

BtcTurk, a Turkish 🇹🇷 crypto exchange, integrated the Lightning Network for faster deposits and withdrawals. Tether is hugely popular in Turkey, we’re excited for local users to start leveraging USDT on LN!

Speed launched their USDT Tron bridge to Taproot Assets, and released their swap feature, allowing users to switch between Bitcoin and USDT-L (their Taproot Assets bridged USDT).

Lamassu announced that all of their ATMs now support Lightning deposits and withdrawals, thanks to an integration with the Blink API.

• 🇬🇹 Osmo Wallet has seen a 14,900% growth in Lightning payments over the last two years as Guatemala’s #1 Lightning wallet.

• 🦘 Wallet of Satoshi is approaching their 21 millionth LN payment, only a few thousand away!

• 📈 Coingate, the crypto payment processor, saw Lightning Network usage double from 2024 to 2025, with December recording the highest percentage of payments using LN!

• 💹 LNFi announced that their Taproot Assets LN-based BTC-USDT perpetual swap product crossed $10M in 24hr volume for the first time on November 27!

• 🌊 LQWD Financial officially routed their one millionth Lightning Network transaction on November 20th.

• ⛏️ BTC Miner App, a Bitcoin Lightning mobile game, reached 100k daily active users.

• ➕ Lightning Network Plus, the popular website for LN liquidity management, helped allocate 200+ BTC across 6k+ new channels for 1.7k new users in 2024.

• 🎭 The State of Louisiana became the first state in the USA to accept Bitcoin via the Lightning Network.

• 🎧 Preston Pysh and Luke Gromen discussed Tether’s USDT integration with the Lightning Network, and the impact on global payments and traditional banking on an episode of the Investor’s Podcast.

• 📠 Fewsats built a hackathon project where Replit’s AI Agent product purchases a domain for a new project with a programmatic Lightning payment. They also released a new L402 tool that allows AI agents to pay with LN or credit card, and published a demo for creators to monetize their content with Lightning.

• 🦊 LN Exchange announced an integration with Metamask, allowing users of the popular browser wallet to effortlessly bridge assets and trade directly on the Lightning Network thanks to their Astra Bridge integration.

• 🐝 Alby released Alby Go, a Nostr Wallet Connect based mobile Lightning wallet.

• 🇰🇪 Tando, a new app bridging LN and Mpesa for the Kenya market, received rave reviews by the Africa Bitcoin Conference attendees for a smooth UX for bitcoin payments.

• 🇻🇳 Aliniex, a Vietnam-based cryptocurrency exchange, added Lightning Network support by partnering with Neutronpay, offering direct off-ramp support to all of their clients.

• ⛈️ Zeus launched Zeus White: a new white-glove node management, point of sale, and integrated enterprise solution for businesses. They also announced that January was an ATH month for their Lightning Service Provider, “and by a great margin.”

• 🌌 Astra Labs launched the Astra Bridge, a Taproot Assets LN-based interoperability solution for the Base blockchain, and is partnering with Eliza OS, an operating system for AI Agents, to revolutionize agentic payments on the Lightning Network.

• 🈸 Bittap Wallet is now live on Signet and available in the Google Play store, providing a permissionless on-chain Taproot Assets experience for end users.

• 🐪 Habibitcoin built Tajfi - a Taproot Assets wallet that lets users control their off-chain assets with just a Nostr pubkey, while a third party operator progresses the underlying UTXO - at the TABConf hackathon.

• 🎸 Adam Curry, known as the Podfather for his early contributions to podcasting, hosted a live Boostagram Ball concert at the legendary Antone’s in Austin featuring live LN-based tips.

• 🏦 Banxa, a global on/off-ramp, expanded their partnership with Zero Hash to include Lightning Network transfers.

• 🤝 Neutronpay announced a strategic partnership with BitGo Singapore, paving the way for expansion of their Bitcoin and Lightning Network services across Asia-Pacific (APAC), after enabling fiat payouts for their Singapore customers.

• 🌏 Bitcoin News wrote a great profile on Neutronpay CEO Albert Buu, highlighting how Lightning is growing in SE Asia via Payment Service Provider (PSP) adoption.

• 🔨 Amboss released Magma AI, the first machine learning-powered channel recommender on LN, to help node operators pick the best channels.

• 🇵🇭 Pouch launched a direct integration with Bitrefill, allowing their Filipino users to purchase global digital products using Lightning directly from the Pouch app.

• 🇲🇽 Swapido is a new non-custodial Lightning-first Bitcoin exchange in Mexico that allows users to sell sats via the Lightning Network and receive pesos in under a minute into any Mexican bank account.

• 🌆 Evento, a new app for promoting and managing RSVPs for events, integrated support for users to pay for events through the Lightning Network, using Lightning Addresses.

• 📜 Clara Shikhelman co-authored a paper on Lightning Network economics, covering cost-reducing strategies for network topology and algorithms to approximate minimum-cost structures.

• 📚 Dhananjay Purohit published a library called L402_middleware, designed to enhance L402 adoption among Rust developers.

• 🇸🇻 The Torogoz Dev initiative for training El Salvador-based devs on bitcoin and Lightning graduated a new class, supported by Bitfinex!

• ♣️ The Cornell Bitcoin Club now has a Lightning node. Through a partnership with Voltage, the Bitcoin Students Network is offering the opportunity for all Bitcoin student clubs to run their own Lightning nodes.

• 🇨🇷 Bitcoin Jungle, the circular economy initiative in Costa Rica, has reached 450 merchants accepting Lightning payments.

• 🚢 Ark Labs announced a new Virtual Channel construction, enabling an Ark user to create a one-way time-limited channel as an off-chain VTXO.

• 🎤 San Juan Bitdevs hosted a Lightning Unplugged event featuring NiftyNei, founder of the bitcoin++ conference series, and Rockstar Dev of BTCPayServer.

• ➕ Lightning Network Plus added a batch channel open feature to their web-based Lightning Node Management UI for LND users, allowing for up to 50% savings on fees and blockspace.

• 🥜 Elnosh, a dev from the Cashu community, extended LND’s HTLC Interceptor API to allow for just-in-time LN channel rebalancing with ecash.

• 🎵 Wavlake was featured in a Forbes article by Frank Corva showing how musicians are making more money with the Value for Value model than they were through apps like Spotify and Apple Music, and also (re)introduced Listen To Earn, a way to earn rewards over Lightning by listening to music.

• 🤖 L402.org, a website about the internet-native payment protocol for AI agents, is a finalist for ProductHunt’s Golden Kitty awards.

• 🧑‍💻 Africa Free Routing hosted a Cape Town Lightning Developer Bootcamp Jan 30 - Feb 1, and provided scholarships for select applicants, after hosting an LN bootcamp in Nairobi in December, helping developers build LN applications.

• 🇹🇭 PlebQR is a new service enabling Lightning payments anywhere in Thailand via interoperability with SimpleX relays and an escrow service. Similar QR code payment systems exist in Singapore, Malaysia, India, China, and many other SE Asian countries.

• 🇮🇩 Koral is a new app allowing Lightning Network users to interoperate with the Indonesian payment system QRIS via QR codes and an escrow service, similar to PlebQR.

• 🇳🇬Mavapay, the Nigerian payments provider, demonstrated how they use Lightning as an interoperability layer by sending a Naira-denominated amount of bitcoin to Orange SaaS, the South African payments provider, who instantly converted it Rand.

Breez, the popular Lightning wallet SDK developer, recently released an excellent report on bitcoin payments. As seen in the above screenshot, they estimate that more than 650M people have access to the Lightning Network today. To put this in perspective, a country with that population would be the third largest on Earth, almost doubling the population of the United States!

With 650M potential users today, we are clearly at the point where more volume is about to start flowing through the network. The question is: what application or tool could get all 650M users to transact on Lightning multiple times per day?

The answer is obvious: stablecoins!

Tether bringing the world’s most popular stablecoin to Lightning not only brings USDT itself, it can also bring over 350M users and over $10T in annual volume. It is important to note that these users creating this volume are loyal to the asset, not to the underlying chain. Seeking lower fees, and faster settlement time, the earliest users transitioned from on-chain bitcoin to Ethereum, then from Ethereum to Tron, and will soon move to Lightning as it has the lowest fees and fastest transactions coupled with bitcoin’s leading security and decentralization. The volume from new stablecoin users will lead to higher routing node operator earnings, inducing more capital allocation to the network, and start another period of exponential growth for the network as a whole.

Once Tether is integrated with Lightning, users will be able to send payments in USDT, and have the recipients receive bitcoin, or vice versa. This is because the multi-asset Lightning Network design prioritized interoperability with the existing network, so wallets and exchanges that upgrade to support stablecoins will also allow users to pay services that only support bitcoin. Users can experience this today on the Speed Wallet with its bridged stablecoin. Adoption will continue to be bottom-up and organic, which is incredibly exciting given how much demand there is for USDT globally and particularly in emerging markets. As time passes, more stablecoins will be issued, and all will natively interoperate thanks to the multi-asset Lightning Network design…imagine paying a USD-denominated invoice with Mexican pesos over Lightning. Coming 🔜.

In December 2024, we released Taproot Assets Daemon v0.5 which included a large number of usability and security improvements. Namely, we enhanced the RFQ (Request for Quote) RPCs to allow for greater precision, and added the ListBurns method to enhance issuer’s ability to communicate supply changes more granularly. It is also important to note that Taproot Assets channels opened on previous versions of tapd and litd will need to be closed and re-opened. To learn more about this release and get started building with Taproot Assets, developers can check out the API docs, read the getting started guide, and test with Lightning Polar release, a popular application for local app development.

For Lightning Loop, a service that allows users to replenish liquidity on the Lightning Network, with release v0.29 and beyond, users can now use Static Address Loop In. This feature leverages MuSig2, a protocol for aggregating public keys for the Schnorr digital signature algorithm, to greatly reduce the complexity of the user experience, allow for the potential of locking in lower costs, and enable swap retries. If you are interested in using Static Loop In, check out our guide and try it out today!

• CEO Elizabeth Stark announced USDT is coming back to bitcoin on a fireside chat titled “It All Comes Back to Bitcoin” with Tether CEO Paolo Ardoino and Investor Brian Murray at Plan B El Salvador. She spoke about how “All Layers Lead to Lightning” at the Plan B Conference in Lugano with BTC Sessions, and discussed “The Future of Bitcoin & Lightning” with Rockstar Dev at Bitcoin Amsterdam.

• CTO Laolu Osuntokun joined two panel discussions at BTC Tokyo: one to discuss various Bitcoin L2 proposals with Blockstream and Bitfinex, and another Lightning Protocol Devs Ask Me Anything (AMA) with Blockstream. He also spoke with Bitcoin Optech on Twitter Spaces about his LN Summit 2024 summary.

• Head of Business Development Ryan Gentry spoke about 2025 Stablecoin Predictions for America with Osmo Wallet CEO Piero Coen, Taxbit Head of Accounting Solutions Aaron Jacob, and Voltage Head of Marketing Bobby Shell.

• Head of Product Growth Michael Levin discussed “Neutral, Programmable Money for the Age of AI” at BTC Tokyo, opening the crowd’s eyes to the possibilities of machine to machine Lightning payments. He also spoke about “Lightning and AI: Where the Bots Pay You” at Bitcoin Amsterdam.

• Head of Bitcoin Engineering Oliver Gugger discussed the Taproot Assets protocol from an engineer’s perspective on the Dezentralschweiz Podcast.

• Developer Advocate Hannah Rosenberg led a popular workshop at TABConf on Working with Taproot Assets on Lightning, presented the multi-assets Lightning vision at Satsconf with a talk titled “Taproot Assets: Stablecoins at the Speed of Lightning”, and joined the Connect the World podcast to talk about the Taproot Assets protocol, global stablecoin demand, and why it's best to serve that demand with bitcoin infrastructure. She also spoke about everything you can build with bitcoin and the Lightning Network at the BUIDL Here conference in Puerto Rico.

• Infrastructure Engineer Elle Mouton joined Bitcoin Optech’s Newsletter Recap on Twitter Spaces to discuss Gossip 1.75 and other technical topics.

Are you passionate about bringing bitcoin to billions? Does building the internet of money with incredibly talented people excite you? We are hiring for a number of roles across the company.

These roles include Assets Protocol Engineer, Business Development Strategist, Lightning Developer Evangelist, Cryptographic Protocol Engineer, Platform Engineer, and more.

Join us in making magic internet money a reality! 🧙‍♂️

Want to get involved? Join the LND Developer Community on Slack.