Bitcoin’s layer-2 scaling platform, Lightning Network, could see a surge in stablecoin volume over the next couple of years, driven by increased retail and institutional adoption, according to industry experts.
Speaking to Coinpectra, Graham Krizek, founder and CEO of Lightning Network payments provider Voltage, said increased adoption of the layer-2 network will see it handle 5% of the global stablecoin volume as early as 2028.
“Five percent [or more] of stablecoin volumes [will be] on Lightning Network at minimum in three years.”
Current daily stablecoin volume is around $180 billion, according to CoinGecko, which means there could be as much as $9 billion traded on LN using current figures. This will likely increase over the coming years as stablecoin regulations such as the GENIUS Act are rolled out in the United States and globally.
Krizek said that stablecoins will accelerate the adoption of the network as “Lightning is the top scalability tool for stablecoins,” and that stablecoin volumes on the scaling network could total billions.
He acknowledged that there is little stablecoin activity on the Lightning Network right now, but this could soon change.
“Stablecoins are just now starting to come to Lightning, and some of the major players like Tether or Circle are not yet live. So the current percentage [of volume] is near zero but will be growing in the second half of this year.”
It may have already started
It may have already begun as the world’s biggest stablecoin issuer, Tether, announced in January that it was bringing Tether (USDT) to Bitcoin with native LN support.
In June, Lightning Labs released the latest version of Taproot Assets (v0.6) to make the network “a decentralized forex layer for stablecoins on Bitcoin.”
Meanwhile, Tether CEO Paolo Ardoino has previously expressed concern that the “global shared state” of blockchains is not scalable, and Lightning’s peer-to-peer nature makes it the best platform for large-scale stablecoin transactions.
“The beauty of USDT on Lightning is that it is the perfect way to do high-scale transactions,” he said in an interview in April.
Lightning adoption drivers
Krizek said that LN adoption will be driven by retail and developers who are “leading the wave.”
“Edge cases are being built by developers, and retail is always using, testing and exploring ways in which Lightning is becoming a staple to these new edge cases.”
Additionally, retail customers are demanding Lightning from the businesses, “which is why we’re seeing an increase in businesses like exchanges adding Lightning support,” he said, adding that institutional interest is also growing.
“Traditional institutions are also starting to explore and realize the value of Lightning and its impacts on managing risk, having better access to working capital, and reducing counterparty and chargeback risks, but we are still early,” he said.
Exchanges have been quick to adopt the LN for cost savings and the benefits of much faster transactions, he said, noting that firms such as Cash App are already using it, with 25% of their BTC payments on the LN.
“Any business that uses Bitcoin will have Lightning integrations. Instant settlement will be standard, like we expect from any payment option.”
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Lightning Network capacity at $448 million
The Lightning Network currently has 14,000 nodes, 44,800 channels and a capacity of 3,820 BTC, worth around $448 million at current prices, according to Amboss, Krizek’s preferred LN metrics provider.
Bitcoinvisuals reports similar figures but shows that network capacity, the measure of locked BTC liquidity rather than volumes transacted on LN, has declined 23% since the beginning of this year.
“We are seeing less channels in total, and larger channels established, which validates capital efficiency and a more optimized network,” Krizek pointed out.
Access to the LN, which is measured by total users of exchanges, wallets, neo-banks and payment platforms with access, is currently above 700 million, having doubled since last year, he estimated.
Voltage positions itself as an infrastructure provider, helping wallet developers integrate stablecoin functionality on the Lightning Network.
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