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Tether, the world’s leading stablecoin issuer, has announced the integration of USDT into Bitcoin’s ecosystem, including its base layer and the Lightning Network.
By leveraging Bitcoin’s unmatched security with Lightning’s efficiency, Tether aims to redefine how stablecoins function within the cryptocurrency ecosystem.
Tether Enhances Bitcoin’s Financial Ecosystem
The move is expected to revolutionize stablecoin usage within the Bitcoin ecosystem, enabling seamless, high-speed, and low-cost transactions. With over 350 million users worldwide, USDT’s adoption of the Lightning Network will provide developers and users with the reliability of Bitcoin. It will also deliver the efficiency of Lightning-enabled payments.
“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,” said Elizabeth Stark, CEO of Lightning Labs, in a statement shared with BeInCrypto.
It comes amid the growing demand for Bitcoin among institutional and retail investors. The integration of USDT further cements the pioneer crypto’s role in global financial systems.
The integration is powered by the Taproot Assets protocol, developed by Lightning Labs. This protocol leverages Bitcoin’s security and decentralization while enhancing transaction speed and scalability.
As the Taproot Assets protocol expands Bitcoin’s functionality, tokenized assets such as USDT can operate without compromising the blockchain’s decentralized nature. The integration will unlock new financial applications, including micro-transactions, remittances, and efficient cross-border settlements.
“Tether is committed to driving innovation in the Bitcoin ecosystem. By enabling USDT on the Lightning Network, we are reinforcing Bitcoin’s foundational principles of decentralization and security while offering practical solutions for remittances and payments that demand speed and reliability,” the statement added, citing Tether CEO Paolo Ardoino.
Tether Extends Reach Despite Regulatory Challenges
It comes barely a week after Tether revealed plans to launch a blockchain academy in Vietnam. Two weeks ago, Tether also facilitated upgrading and handing the Bridged USDT on Arbitrum to the USDT0 standard. BeInCrypto reported that this upgrade ensures seamless interoperability while maintaining a 1:1 backing on Ethereum.
According to USDT0, Arbitrum currently leads all Layer-2 networks in stablecoin adoption. Over 1.3 billion USDT was minted under the new standard.
“With over 1.3 billion USDT minted, Arbitrum leads all L2s in stablecoin adoption. Starting today, USDT on Arbitrum is upgraded to the USDT0 standard,” USDT0 shared on X.
Despite these technological advancements, Tether faces regulatory hurdles. In Europe, the MiCA (Markets in Crypto-Assets) framework is particularly set to impose stricter controls on stablecoins. In anticipation of MiCA’s rollout, several EU-based exchanges have already delisted USDT, causing liquidity and market stability concerns.
However, some experts believe MiCA’s impact on Tether will be minimal. This stance is based on the fact that the majority of USDT’s trading volume originates from Asia.
“…80% of USDT’s trading volume comes from Asia, so the EU delisting won’t have any severe impact. This is evident from USDT’s market cap, which is down by only 1.2%,” claimed Axel Bitblaze.
Regarding regulations, Tether has secured a major license in El Salvador, leading to its relocation to the country. This move aligns with El Salvador’s pro-Bitcoin stance and further strengthens Tether’s position in a jurisdiction that embraces digital assets.
Meanwhile, regulatory uncertainty continues to loom over Tether in the United States. Brian Armstrong, CEO of Coinbase, has stated that if new legislation requires it, the exchange would consider delisting USDT. This reflects the broader regulatory pressures that stablecoin issuers face, particularly in the US market.
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