Tether launches USDT on Bitcoin Lightning Network

Tether has announced the launch of USDT stablecoins on the Lightning Network using the Taproot Assets protocol.

This marks Tether's third attempt to integrate USDT tokens into the Bitcoin ecosystem:

• In 2014, these tokens were issued on the Bitcoin blockchain using the Omni Layer tokenization protocol
• In 2019, USDT tokens were also issued on Liquid, a Bitcoin sidechain

However, these tokens never gained significant traction among Bitcoin users (both L1 and L2):

• The total USDT supply currently exceeds 139 billion tokens
• Less than 0.1 billion (91 million) are issued on the Bitcoin mainnet
• Less than 0.04 billion (36 million) exist on the Liquid blockchain

For perspective, Ethereum hosts 74 billion USDT, while the Tron network carries 59 billion.

No tokens have been issued yet using the new Taproot Assets protocol. For this to happen, someone would need to deposit dollars with Tether and specifically request minting tokens on the Lightning Network. I find it hard to imagine why anyone would need this.

There are two main reasons for my skepticism:

• First, the numbers above speak for themselves. Bitcoin users have shown very limited demand for USDT.
• Second, while existing Omni Layer-based tokens can technically be transferred through the Lightning Network, the only wallet that supported this feature discontinued development in 2023 due to minimal usage.

I don't see much potential in Tether's latest attempt to sell stablecoins to Bitcoiners. Bitcoin and USDT represent fundamentally different worlds - Bitcoin operates independently of the fiat system, while USDT relies entirely upon it.

Nevertheless, these worlds do occasionally intersect. At rabbit.io, you can always exchange BTC for USDT and vice versa - conveniently and without registration. It doesn't require Tether to issue tokens on the Taproot Assets protocol, as we handle token exchanges across all networks.