Tether (USDT) Stablecoin Sets Sights on Lightning Network Launch

The peer-to-peer system of nodes carries a limited amount of Bitcoin (BTC), but Tether has set out to make it available for USDT.

Bitfinex, the exchange sharing leadership with the issuer of Tether, has given signs it may be closer to launching the USDT digital asset on the Lightning network. Paolo Ardoino, chief technology officer of Bitfinex, has spoken about the possibility with The Block.


The news of moving to the Lightning Network arrives just after Tether announced it would start issuing a version of USDT on the EOS network. Currently, USDT coins exist on the Bitcoin Omni layer, with the biggest supply of above 3.13 billion coins. More than 600 million coins have been issued over the Ethereum (ETH) network. TRON-based USDT ran into a roadblock but the latest addition, the EOS-based stablecoin seems set for launch.

Meanwhile, the Lightning Network has grown in the past year, expanding to more than 8,000 nodes.


Still, the network carries a relatively small transaction volume of around 1,100 BTC in total capacity. Lightning Network channels are a matter of cooperation between participants and the readiness to relay transactions.

For now, Tether has not released explanations on how USDT coins would be made compatible with the LN. Currently, the stablecoin is mostly used on exchanges, and not as a direct means of payment. USDT is relatively easy to transfer between markets, with millions of coins moved every day. But the LN has a much smaller capacity compared to the USDT turnover.

USDT saw more than $27 billion’s equivalent during the recent peak of Bitcoin (BTC) prices and has volumes of $20 billion as of Monday. Each coin moves more than six times through exchanges, showing that even with an increased supply, USDT is used with extreme activity compared to other digital assets.

USDT trading now takes over more than 28% of all activity on the cryptocurrency markets, on par with BTC trades, based on CoinMarketCap data.

At the same time, the recent admission that each USDT was backed only by 74% of actual dollars, chipped the reputation of the asset. In effect, anyone supporting the $1 dollar peg is also subsidizing the $900 million loan from Tether to Bitfinex.

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