The CEO of Lightning Labs has hinted that stablecoins may soon be operating on the Bitcoin network. This could revolutionize the way digital currency is used and traded. Stay tuned for updates on this exciting development!
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Stablecoins running on Bitcoin are getting closer to reality thanks to new functionality developed by Lightning Labs using the network’s Taproot upgrade. Elizabeth Stark, CEO of Lightning Labs, shared this exciting news at FT Live’s Crypto and Digital Assets Summit in London.
The Taproot assets protocol developed by Lightning Labs aims to bring stablecoins and tokenized assets to the Bitcoin blockchain. Stark mentioned that significant progress has been made towards this goal, with the testing of transactions on Lightning already underway:
“We released an early part of the code in October and recently demoed the first-ever transaction on Lightning of an asset. The idea is to have crypto dollars and stablecoins on the Bitcoin blockchain.”
Stark highlighted the benefits of utilizing Bitcoin’s network for stablecoins, citing its security and decentralized nature as significant advantages over other blockchains that have high fees and other issues.
Discussing the value of Bitcoin and stablecoins as a store of value, especially in regions facing inflation and currency devaluation, Stark emphasized the growing adoption of stablecoins post-COVID-19. She noted that users in emerging markets have been increasingly turning to stable assets for value stability.
The dominance of Tether and Circle’s USD Coin in the stablecoin Market was mentioned by Stark, pointing out that these stablecoins hold more United States Treasury bonds than major nations like Germany and South Korea. This choice of stable assets by users in inflation-hit countries reflects the need for a reliable store of value.
Stark underlined the importance of Lightning-powered stablecoins in enabling the issuance of stable assets on the Bitcoin blockchain. By providing the infrastructure for asset issuers to tokenize real-world assets, Lightning Labs aims to offer a cost-effective alternative to traditional financial systems:
“If you look at Visa where fees in the U.S. can be upward of 3%, or even 1%, the fees, transacting with stablecoins on Lightning can be dramatically lower, a cent or less than that.”
This development could revolutionize global transactions by offering lower fees and faster speeds compared to conventional financial networks, making it a competitive option for transacting worldwide.
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1. What are stablecoins on Bitcoin?
Stablecoins on Bitcoin are digital tokens that are pegged to the value of Bitcoin to minimize price volatility.
2. Why are stablecoins coming soon?
Stablecoins on Bitcoin are being developed to provide users with a more stable and secure option for trading and storing value in the cryptocurrency Market.
3. What will be the benefit of using stablecoins on Bitcoin?
The main benefit of using stablecoins on Bitcoin is that it allows users to take advantage of the benefits of Bitcoin while minimizing price volatility.
4. How will stablecoins on Bitcoin work?
Stablecoins on Bitcoin will be built on the Lightning Network, a second-layer scaling solution for Bitcoin that allows for instant and low-cost transactions.
5. When can we expect stablecoins on Bitcoin to be available?
Stablecoins on Bitcoin are currently being developed by Lightning Labs and are expected to be released in the near future.
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