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Tether's USDT Integrates with Bitcoin, Boosting Global Payments

Coin WorldFriday, Jan 31, 2025 1:32 am ET

1min read

Tether, the issuer of the world's largest stablecoin, USDT, has announced a significant expansion by integrating its token with the Bitcoin network, including the Lightning Network. This move, revealed at the Plan B conference in El Salvador on Jan. 30, is set to enhance transaction efficiency and broaden payment options for users worldwide.

Tether CEO Paolo Ardoino and Lightning Labs CEO Elizabeth Stark jointly announced the integration, which leverages the Taproot Assets protocol. This upgrade, introduced in 2022, enhances Bitcoin's ability to support tokenized assets. The integration will enable faster and more cost-efficient transactions, making stablecoin payments more accessible globally.

With a market capitalization of $139.4 billion, USDT dominates the stablecoin market, significantly surpassing its closest competitor, Circle's USD Coin (USDC), which stands at $53.1 billion. In 2024 alone, USDT processed a staggering $10 trillion in transactions, placing it in close competition with traditional financial giants like Visa, which handled $16 trillion over the same period.

One of the key benefits of this integration is the potential for seamless merchant adoption. Businesses that already accept Bitcoin via the Lightning Network will be able to integrate USDT as a payment method using the same infrastructure. This could significantly increase the adoption of stablecoin payments, especially in regions where volatility in local currencies drives demand for dollar-pegged alternatives.

“Millions of people will now be able to use the most open, secure blockchain to send dollars globally,” Stark noted, emphasizing the role of stablecoins in providing financial stability to emerging markets. Lightning Labs envisions a future where AI-driven transactions and autonomous vehicles benefit from the enhanced efficiency of micropayments facilitated by USDT over Lightning.

This announcement follows Tether's recent decision to relocate its headquarters to El Salvador, the first and only country to recognize Bitcoin as legal tender. The move signals Tether's commitment to supporting Bitcoin adoption and advancing financial innovation in the region. El Salvador introduced the Lightning Network-powered Chivo Wallet in September 2021, aiming to promote Bitcoin usage among its citizens. However, the adoption has faced challenges, with mixed reactions from the public. Initially, the government mandated that merchants accept Bitcoin, but recent agreements with the International Monetary Fund (IMF) have led to a shift toward voluntary acceptance

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