Lightning Labs has tested Taproot Assets-based stablecoin transactions on the bitcoin network

What’s new? Lightning Labs has conducted its first test transaction with a stablecoin based on the Bitcoin blockchain, as announced by its CEO Elizabeth Stark. The ability to place stablecoins and other assets on top of the Bitcoin network will facilitate new use cases and attract more people to the digital asset sector, she said.

Decrypt’s material

What else is known? Lightning Labs is the developer of the Lightning Network bitcoin payment protocol and the Taproot Assets protocol for creating stablecoins on the Bitcoin network. Both were used in a test transaction.

Lightning Network is a Bitcoin-based Layer 2 (L2) network, designed to scale the main blockchain, speed up and reduce the cost of transactions, implemented into the mainnet in 2018.

Taproot Assets protocol, was introduced last October, it provides a complete set of tools for issuing and managing stablecoins and other digital assets on the bitcoin blockchain. Transactions with assets issued using Taproot Assets are conducted through the Lightning Network, leveraging bitcoin’s existing liquidity.

Taproot Assets provides developers in the Lightning ecosystem with a comprehensive API interface for performing asset issuance and redemption and a data store on which to run a blockchain explorer for end-user convenience.

Elizabeth Stark, speaking at the Financial Times Crypto and Digital Assets Summit, noted the renewed interest of developers in the Bitcoin blockchain after the April 20 halving, many of whom are working on creating DeFi protocols.

Build on Bitcoin L2 network developers announce the launch of the mainnet

The total value locked of the project has already reached $280 million

Read more

Stark also pointed to a recent IMF report noting that bitcoin is “has become an increasingly important channel to send remittances and evade capital controls in emerging markets.”

Stark emphasized that this discovery by the IMF “not at all surprising to those of us who are on the ground who are working with developers and communities in these places.” She said that in markets in hyperinflation-prone countries with authoritarian regimes, “Bitcoin becomes an asset and a means of transacting when they don't have other options.”