Tether's stablecoin set for integration with Bitcoin Lightning.

The announcement was made jointly by Tether CEO Paolo Ardoino and Lightning Labs CEO Elizabeth Stark on Jan. 30 at the Bitcoin-focused Plan B conference held in San Salvador, El Salvador. This collaboration marks a significant development in expanding Bitcoin’s functionality for broader financial applications.

The Taproot Assets protocol, introduced in 2022, enhanced the Bitcoin network’s capabilities by enabling support for tokenized assets. Leveraging this protocol, Lightning Labs has developed a solution to bring Tether’s USDT stablecoin to the Lightning Network. 

Tether, the leading stablecoin with a market capitalization of $139.4 billion—nearly three times that of its closest rival, Circle’s USDC at $53.1 billion, according to CoinGecko data—will now be accessible on Bitcoin’s Lightning layer. 

This integration aims to combine the stability of USDT with the efficiency and scalability of the Lightning Network, creating new use cases for Bitcoin in global payments.

Tether has demonstrated its dominance in the digital payments space, processing $10 trillion worth of transactions in 2024 alone, a figure approaching the $16 trillion processed by payment giant Visa. Tether’s USDT is currently supported across more than ten blockchains, including Ethereum, Tron, Solana, and Avalanche. Adding Bitcoin’s Lightning Network to this list further strengthens Tether’s ecosystem.

In a blog post, Lightning Labs’ CEO Elizabeth Stark and Business Development Director Ryan Gentry emphasized the practical benefits of this integration. Merchants who already accept Bitcoin via the Lightning Network can now easily add USDT as a payment option without requiring additional infrastructure. 

Stark noted, “Millions of people will now be able to use the most open, secure blockchain to send dollars globally.” This is particularly significant for users in emerging markets, where stablecoins are often used as a safeguard against local currency devaluation and to preserve savings.

The partnership also positions the Lightning Network for future technological advancements. Lightning Labs highlighted that the integration could facilitate a new wave of transactions, particularly among artificial intelligence agents and autonomous vehicles. 

Additionally, it will support USDT micropayments, making the Lightning Network an even more versatile solution for a range of financial applications.

Earlier this month, Tether announced its relocation to El Salvador, the only country where Bitcoin is recognized as legal tender. The country has been a prominent adopter of Bitcoin, introducing the Bitcoin Lightning Network-supported Chivo Wallet in September 2021. However, the rollout faced challenges and limited adoption. 

Initially, merchants in El Salvador were mandated to accept Bitcoin as a payment method, but this requirement was recently made optional as part of a $1.4 billion loan agreement with the International Monetary Fund (IMF).

The integration of Tether’s stablecoin into the Lightning Network represents a milestone in combining the benefits of Bitcoin’s open, decentralized system with the stability and efficiency of Tether’s USDT. This development is expected to unlock new opportunities for global commerce, digital payments, and financial inclusion, particularly in regions that rely heavily on stablecoins as a financial lifeline.