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Tether's USDT Joins Bitcoin, Revolutionizing Crypto Finance

Coin WorldThursday, Jan 30, 2025 5:58 pm ET

1min read

Tether, the world's largest stablecoin issuer, has announced a significant milestone in the cryptocurrency ecosystem: the integration of its dollar-backed stablecoin, USDT, with the Bitcoin network, including the Lightning Network. This move, revealed by Tether CEO Paolo Ardoino at a Bitcoin conference in El Salvador, marks a new era for stablecoins and enhances global finance by combining two dominant forces in crypto.

USDT, with a market capitalization of over $139 billion, is the world's top stablecoin, used by hundreds of millions of people worldwide as a secure form of payment linking traditional finance to the crypto economy. Meanwhile, Bitcoin, the world's largest and most influential cryptocurrency, has been slow to attract on-chain users due to its initial design not supporting decentralized applications. Scaling networks like the Lightning Network have filled this gap, making layer-2 transactions on Bitcoin cheap and speedy, and enabling the integration of assets like USDT into the Bitcoin ecosystem.

Elizabeth Stark, CEO of Lightning Labs, the leading developer of infrastructure on the Lightning Network, stated that millions of people will now be able to use the most open, secure blockchain to send dollars globally. USDT is currently available on 17 other blockchain networks, including Ethereum and Solana. As crypto becomes increasingly intertwined with mainstream finance, stablecoins have never been more critical to connecting both worlds. Tether is by far the most popular stablecoin, allowing users to easily park crypto funds in a non-volatile asset pegged to the U.S. dollar.

However, stablecoins generally—and Tether specifically—have come under increased scrutiny as their influence over the global economy has grown. Lawmakers have questioned the operational integrity of stablecoins, particularly Tether, which has faced criticism regarding the transparency of its reserves. During a recent congressional hearing, executives were called to discuss the need for rigorous auditing standards for stablecoin issuers to ensure financial stability and consumer protection.

The integration of USDT with Bitcoin signals potential changes in stablecoin dynamics and digital currency transactions. As Tether expands to include Bitcoin, the role of stablecoins as pivotal players in financial technology becomes evident. This strategic move positions Tether to better navigate the increasing intertwining of cryptocurrency and traditional finance, reinforcing the importance of stablecoins amidst regulatory challenges.

The collaboration between Tether and Bitcoin comes at a time when stablecoins

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