Recently, Lightning Labs, a layer 2 Bitcoin infrastructure company, announced the launch of the mainnet alpha version of Taproot Assets, a protocol that allows for the issuance of stablecoins and real-world assets on the Bitcoin and Lightning Network.
According to Ryan Gentry, Director of Business Development at Lightning Labs, the current version, Taproot Assets v0.3, will provide developers with full functionality to issue, manage, and explore stablecoins and other assets on the Bitcoin blockchain.
“We believe Bitcoin will enter a new era when a myriad of global currencies are issued on the network through Taproot Assets. Additionally, forex transactions worldwide will be processed swiftly through the Lightning Network.”
– Lightning Labs announcement
Notably, Taproot Assets will operate by routing through the existing Bitcoin liquidity on the Lightning Network.
Furthermore, Ryan Gentry emphasized that integration would expand Bitcoin’s network effect and bring Bitcoin closer to “Bitcoinizing the dollar.”
Gentry described the developer demand for stablecoin applications on Bitcoin as “significant” – especially when some stablecoin issuers hold more US Treasury bonds than entire countries like Germany or South Korea. For this reason, Taproot Assets has emerged to pave the way for stablecoins, tokens, and RWAs (Real World Assets) to enter the Bitcoin network.
In addition to Taproot Assets, Bitcoin Drivechains (via Bitcoin Improvement Proposal-300), Botanix Labs’ Spiderchain, and BitVM are also being developed within the Bitcoin ecosystem to enhance the capabilities of the Bitcoin blockchain.