USDT’s anticipated integration into the Lightning Network has been a topic of discussion among crypto enthusiasts for years. Despite the evident advantages Lightning offers—such as instant, low-cost transactions—USDT’s transition to this layer has been over and again stalled.
In 2019, Paolo Ardoino, who was then Tether’s CTO (he is now the company’s CEO), had assured that, no later than next year, USDT would reach the second layer of Bitcoin, but this did not happen.
Similarly, Adam Back, CEO of Blockstream, expressed optimism in 2019, stating, “Stablecoins on the Lightning Network… address both volatility and transaction speed issues, making the Lightning Network a more compelling option for everyday transactions and financial services.” However, the complexities of implementing stablecoin support on a network primarily designed for Bitcoin have caused ongoing delays, leaving these predictions unfulfilled.
In a revolutionary step, Speed, the company behind Speed Wallet, has broken the curse. Speed has launched USDT-L, a wrapped USDT stablecoin on the Lightning Network, joining the $165 billion stablecoin sector and disrupting the traditional stablecoin payments landscape. (Wrapped tokens represent a cryptocurrency from one blockchain on another blockchain).
This is being achieved by Speed’s collaboration with the Taproot Assets protocol developed by Lightning Labs. USDT-L leverages the Lightning Network’s efficiency and extensive user base to deliver fast settlements, low transaction costs, interoperability with Bitcoin (BTC), and enhanced user experience.
Crypto assets on Lightning mean the receiver can choose to receive in one asset (e.g., USDT/BTC), while the sender can send funds in a different asset. The Lightning Network handles the currency conversion and transmission to complete the transaction. This innovation of making cross-currency payments and conversions in real-time is only available on the Lightning Network.
Speaking about the idea behind launching USDt on Lightning Network, Speed’s Co-founder and CEO Jay Patel says, “We observed significant issues linked to high transaction fees and network congestion in USDT’s performance on current platforms such as Ethereum, TRON and SOLANA. These problems have hindered the efficiency and cost-effectiveness of transactions.”
“By launching USDt on the Lightning Network, we aim to provide users with a stable-value option for quick and low-cost transactions. The Lightning Network’s capabilities align perfectly with our vision of making digital transactions seamless and accessible for everyone without any downtime” he adds.
Raj Patel, the Co-founder of Speed, highlights that Taproot Asset USDT-L on Lightning is supported by Ethereum USDT, which in turn is backed by Tether’s funds held by Cantor Fitzgerald. Speed leverages a trusted, custodial bridge to enable USDT transactions on the Lightning Network.
The Lightning Network brings transformative benefits to USDT transactions, offering a compelling alternative to public blockchains like Ethereum, Tron, Solana, TON, and Tezos.
Although Ethereum, Tron, and Solana currently dominate, handling 90% of global USDT transactions, Lightning Network payments have the potential to disrupt this landscape, providing faster, more efficient, and cost-effective solutions for USDT transfers.
One, lower fees. Predictability and the magnitude of transaction fees are critical factors, especially for micropayments in the digital payment world. The Lightning Network offers high speed and remarkably low, stable fees.
Two, higher reliability. The Lightning Network’s decentralized architecture offers superior uptime and reliability for USDT compared to networks like Solana, which has experienced frequent outages, and Ethereum and Tron, which can suffer from network congestion affecting transaction speed and reliability.
Three, improved privacy. Most transactions occur off the main blockchain, reducing public visibility. Payments are routed through multiple channels, obscuring transaction origins and destinations. Nodes only see adjacent hops, not the full payment route or transaction details.
Here’s a tabular comparison of USDT transactions on Lightning vis-à-vis conventional blockchain payments.
Comparison of Lightning with other networks supporting USDT:
One, easy global adoption. The Lightning Network is one of the fastest-growing networks, increasingly adopted worldwide, with notable use cases in remittances and micropayments.
The Lightning Network boasts impressive statistics. It has 15,300 nodes and 51,000 channels, supporting a network capacity of $300 million. Monthly active users exceed one million, while over 100,000 global businesses accept Lightning payments.
Over 50 million wallet downloads have been recorded on the network. Leading exchanges such as Coinbase, Binance, Bitfinex, Kraken, and OkCoin also support Lightning, further underscoring its widespread adoption and growing influence in the crypto ecosystem.
Two, scalability. The Lightning Network does not have any upper limit for transactions per second, making it highly scalable for both micro and large USDT transactions.
Three, enhanced security. The Lightning Network benefits from Bitcoin’s robust security model, operating on top of the Bitcoin blockchain, thus ensuring a secure environment for USDT transactions.
Additionally, as an off-chain solution, the Lightning Network is more energy-efficient than on-chain transactions on proof-of-work blockchains like Ethereum. Recent developments have also introduced smart contract capabilities, enhancing its functionality for USDT transactions.
By leveraging these advantages, the Lightning Network provides an efficient, cost-effective, scalable, and private solution for USDT transactions compared to traditional blockchain networks. The global adoption, continuous innovation, and strong security model further solidify the Lightning Network as the superior choice for USDT transactions.
To experience USDT-L on the Lightning Network, new users can download or access the Speed wallet on iOS, Android, and Chrome.
Businesses can sign up at www.tryspeed.com to start accepting USDT-L and have the flexibility to store it in currency of their choice – BTC onchain or lightning and USDT on lightning or ethereum.
Store USDT-L: Easily convert BTC into USDT-L to achieve price stability
Transact in USDT-L: Send/Receive USDT-L on the Lightning Network
Interoperability between USDT-L & BTC: Send USDT-L and receive Bitcoin on the Lightning Network, or vice versa, with instant settlement and low transaction costs. This also applies to Eth-USDT and USDT-L.
Real-time Swap: Seamlessly convert between BTC and USDT-L, and Eth-USDT and USDT-L, within the Speed Wallet.
Business Acceptance: Businesses can accept global payments in USDT-L and store them as BTC on Lightning, USDT-L, or USDT on Ethereum, eliminating transaction costs, volatility, and delays.
Highlighting the security and transparency of USDT-L, Speed Co-founder Raj Patel says, “USDT-L will be 100% reserved against USDT on Ethereum. All reserve assets will be held in a multisig wallet. Multisig requires multiple keys to authorize a transaction, significantly reducing the risk of unauthorized access.”
“Speed has adopted a strict no-hypothecation policy for USDT-L. Speed reserves backing the stablecoin will not be lent out or used for other purposes and will also ensure daily publication of proof of reserve and monthly publication of a third-party audit report,” adds Patel.
Speed team also provides a clear view of the USDT-L ecosystem, showing live data on the amount of USDT-L in circulation and the reserves backing it on their website. Users can see real-time updates on minting and burning activities over various timeframes, informing them of the flow of how USDT-L is managed. By offering this level of transparency, to see exactly how USDT-L is maintained and managed on the Lightning Network, Speed Wallet aims to build trust and ensure users feel confident in the stability and security of their assets.
The launch of USDT-L by Speed marks a significant milestone in the evolution of digital payments. By combining the stability of USDT with the efficiency of the Lightning Network, this update offers a cutting-edge solution that can likely address the needs of modern businesses and individuals.
“At Speed, our mission is to make Bitcoin accessible to everyone and create an easiest to use payment ecosystem that supports financial inclusion and freedom. Successful adoption of USDT-L will require more users, wallets, and businesses to accept and transact in USDT-L,” says Raj Patel, Co-founder of Speed.
“The Speed team is committed to this mission and is exploring partnerships with leading payment processors, wallets, exchanges and businesses to make USDT-L payments accessible for everyone. By leveraging Speed’s APIs, the aim is to bring the rapid, cost-effective, and versatile advantages of USDT-L transactions to a broader range of platforms,” adds Sumit Behl, Speed’s CMO.
Speed is a pioneering company in the digital payment space dedicated to providing innovative solutions that enhance financial inclusion and freedom. With a strong focus on Bitcoin and blockchain technology, Speed continues to drive the evolution of digital payments with Stablecoin.
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