The Lightning network already enables fast and cheap payments with Bitcoin. Now Lightning Labs wants to build a protocol that enables cheap stablecoin transactions.

It would be an asset to the fast growing stablecoin market: a kind of layer on which stablecoins can move on top of Bitcoin. It would allow us to send (crypto) dollars or euros while benefiting from the security of the Bitcoin network and the transaction speed of Lightning. Anyone with a cell phone could then make local or international payments, without needing a bank, almost for free.

The protocol will be called Taro. It is made possible by Bitcoin's recent Taproot upgrade. To be clear, Taro is not a stablecoin but a teachnology for sending stablecoins.

To fund the project, Lightning Labs, a developer of Lightning, has raised $70 million. The company is backed by Jack Dorsey, Bitcoin believer and former boss of Twitter. Twitter uses the Lightning network for its tipping feature. The Lightning network has grown rapidly in the last year. Also El Salvador uses it for Bitcoin transactions.