Lightning Labs has built a new protocol called Taro to enable the transaction of stablecoins on the Bitcoin Lightning Network.
Lightning Labs, a Bitcoin software firm, has raised big funding round, allowing it to further build the Lightning Network for faster, cheaper Bitcoin and stablecoin transactions.
Valor Equity Partners led the $70 million Series B investment round, which included Baillie Gifford, Goldcrest Capital, and numerous additional angel investors. Lightning Labs develops software and features for the Lightning Network (LN), Bitcoin’s layer-two transaction solution.
According to sources, the cash would go into Taro, a new protocol developed by the company that will allow stablecoins to be transmitted using the LN. Stablecoins will not be issued by Lightning Labs, but the technology will allow them to be transmitted over the network.
Stablecoin transactions became enabled with the November 2021 Bitcoin Taproot release, which also included smart contract capabilities.
Taro, according to the company, would facilitate broader Bitcoin acceptance by allowing the unbanked in developing countries to send money using stablecoins.
“That’s incredibly significant because the opportunity here is for all of the world’s currencies to flow through Bitcoin over the Lightning Network,” said Elizabeth Stark, CEO, and co-founder of Lightning Labs, in an interview with Forbes. She went on to say to Tech Crunch:
“If I were Visa, I’d be scared because there are a lot of people out there that have mobile phones, but now don’t need to tap into the traditional system.”
Lightning Labs raised $10 million in Series A funding in September, following a $2.5 million seed round in 2018.
El Salvador, the first jurisdiction to declare Bitcoin legal tender, is now making considerable use of the LN. It has also been implemented on the payments platform Strike and the Twitter tipping service. According to the statistics, the current network collateral is 3,693 BTC, worth approximately $167 million, representing a 5.8 percent growth over the previous month.
Stablecoins are now an essential component of the digital currency ecosystem, and they are gradually gaining acceptance from worldwide regulators. The United Kingdom’s Economic and Finance Ministry is the most recent to approve fiat-pegged assets, with plans to modify the existing legal framework to include stablecoins as a payment option.
