The CEO of Lightning Labs suggests that Stablecoins on Bitcoin will come soon

Stablecoins running on Bitcoin are getting closer to reality thanks to new functions developed by Lightning Labs using the network's Taproot update implemented at the end of 2021.

Lightning Labs CEO Elizabeth Stark revealed the latest development from the Bitcoin development firm at FT Live's Crypto and Digital Assets Summit in London.

The company's founder gave an excellent explanation of Bitcoin and the Lightning Network to an audience of traditional financial players.

Lightning Labs' Taproot Assets Protocol is building functionality to bring stablecoins and tokenized assets to Bitcoin. According to Stark, developers have made significant strides toward this goal, eventually testing transactions on Lightning:

“We released the first part of the code in October and recently featured the first transaction on Property Lightning. The idea is to have a crypto dollar and stable coin on the Bitcoin blockchain.

Stark added that typically these digital assets have operated on other blockchains that have been plagued by high fees and other issues. She argues that the Bitcoin network is perhaps best suited to facilitate the use of stablecoins because it is a “very secure and decentralized” blockchain.

Bitcoin and stablecoins have value as a store of value.

Stark then went on to discuss Bitcoin (BTC) and the stable coin's value as a store of value, especially in those struggling with inflation and devaluing fiat currencies.

According to Lightning Labs CEO, stablecoin adoption has grown significantly since the Covid-19 pandemic, with users mostly based in emerging markets.

“The most entrenched users are those who want a stable store of value. In some cases, they're using Bitcoin. In other cases, they're using stablecoins, and in some cases it's a combination of the two,” Stark explained.

Related: What is the Bitcoin Lightning Network, and how does it work?

The two biggest stablecoin players – Tether (USDT) and Circle's USD Coin (USDC) – hold more US Treasury bonds than major countries like Germany and South Korea. Stark said this is a very interesting fact, given that it is not the benefit of the end users' desire to hold the stablecoins.

For people in countries struggling with high inflation or difficult economic environments, the choice to hold a stable coin is driven by the need for a store of value.

A stable coin powered by Lightning will be superior

Given the massive growth in the stablecoin market, Stark said the infrastructure is needed to mine stablecoins and real-world assets on the Bitcoin blockchain.

“That's why we're building this protocol, this technology. We are building the railway, not expropriating property. Realtors use our technology to offer real-world certified properties, Stark explained.

Related: Coinbase Integrates Lightning Network for Bitcoin Transactions

The CEO added that financial institutions can sell gold assets, stablecoins and other fiat-backed assets on Bitcoin and then transact on the Lightning network.

Perhaps the most telling thing was the relative cost compared to other blockchains and traditional financial systems that Stark highlighted.

If you look at visas in the US where the fees can be 3% or more than 1%, the fees, trading with statscoins on lightning are surprisingly less, percent or less.

Stark added that this competitively allows people to transact globally at a much lower cost than traditional networks.

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