1. Introduction: From centralised assets to decentralised rails
With regulatory clarity emerging from MiCAR in Europe and the GENIUS Act in the U.S., attention has shifted from issuing stablecoins to optimising the decentralized infrastructure that carries them. Traditional SWIFT, ACH, and card rails cannot compete with blockchain in terms of speed, cost, and programmability.
After the official launch of USDT (July 2014 → November 2014 rebrand) and its first deployments on exchanges like Bitfinex and Poloniex , demand for rapid, low-cost transfers became clear. Traditional banking rails—multi-day wire transfers with variable fees—were incompatible with the emerging crypto economy.
Simon Consulting Insight: Firms are pioneering a“split-compliance” model, where centralised assets (stablecoins) are managed under strict regulation, while value transfers leverage decentralized rails such as the Lightning Network (LN) for speed and efficiency. This model is increasingly vital for cross-border remittances and microtransactions.
After the official launch of USDT (July 2014 → November 2014 rebrand) and its first deployments on exchanges like Bitfinex and Poloniex, demand for rapid, low-cost transfers became clear. Traditional banking rails—multi-day wire transfers with variable fees—were incompatible with the emerging crypto economy.
3. The current network landscape: speed vs. security
The multi-trillion dollar stablecoin ecosystem is fragmented across multiple Layer 1 solutions, each presenting severe trade-offs between speed, cost, and centralization. For commercial payments, the data is unambiguous: efficiency is paramount.
The current landscape for USDT, the dominant stablecoin, highlights the commercial problem LN solves:
Tron's popularity is due to its low cost compared to Ethereum's high gas fees, but even its 2,000 TPS ceiling and $1 fees are insufficient for a global, micro-transaction payment rail.
3. Traditional finance upgrades infrastructure
Major payment players are already embracing stablecoins on decentralized rails to improve efficiency:
1. Visa and Mastercard: Integrating regulated stablecoins for B2B settlement. Visa Direct aims to use stablecoins to pre-fund accounts, cutting settlement from days to minutes.
2. Stripe: Uses stablecoins on fast blockchains like Solana for instant payouts to remote freelancers. This demonstrates how decentralised rails complement regulated fiat processing.
Simon Consulting Insight:Traditional PSPs cannot ignore decentralised rails. Stablecoins are bridging the gap between regulated fiat operations and real-time settlement networks, creating a new competitive landscape for payments.
4. Bitcoin Layer 2: The Lightning Network solution
While Layer 1 transfers (Ethereum, Tron, Solana) are widely used, fees and congestion make them less ideal for high-frequency, low-value payments. The definitive solution lies in the Lightning Network (LN). The LN enables sub-second, low-cost transactions atop Bitcoin's robust security.
To carry stablecoins efficiently on the LN, this capability is being built through two distinct, sophisticated protocols that issue assets on Bitcoin:
The co-existence of these protocols has delivered highly practical solutions:
Case study A: Speed Wallet’s USDT-L (wrapped USDT): High fees and network congestion on Ethereum and Tron hindered the use of USDT for everyday transactions. Speed launched USDT-L (a wrapped USDT backed by Ethereum reserves) on the LN using the TAP framework (August 2024). This provided users with a stable-value option for quick and low-cost transfers , establishing real-time swaps and interoperability.
- The problem: High fees and network congestion on Ethereum and Tron hindered the use of USDT for everyday transactions.
- The solution: Speed Walletlaunched USDT-L (a wrapped USDT backed by Ethereum reserves) on the LN using the TAP framework (August 2024). This instantly provided users with a stable-value option for quick and low-cost transfers.
- Value: The solution established real-time swaps and interoperability: a user can send USDT-L and the recipient can receive BTC over the LN, or vice versa.
Case study B: Joltz & Eulen’s DePix (Brazilian real stablecoin)
- The problem: Brazilians required a secure, stablecoin alternative to fiat systems with greater user sovereignty, particularly one compatible with the widely adopted PIX instant payment system.
- The solution: Joltz and Eulen launched DePix—the first Brazilian Real-denominated stablecoin issued as a Taproot Asset on the Bitcoin network (November 2024).
- Value: DePix provided users with a tool for financial autonomy, seamlessly bridging Bitcoin’s security with the local PIX payment system for instantaneous, secure transactions nationwide.
Regardless of the asset protocol used (RGB or TAP), the LN serves as the Layer 2 transport, leveraging its efficiency for instant transfer. The LN offers performance metrics of typical fees under $0.01 and settlement in seconds, making it essential for mass market adoption.
Simon Consulting Insight: These implementations show that any regulated stablecoin—including EURQ or the upcoming nine-bank euro stablecoin—can be technically deployed on LN. This enables instant, low-cost, global settlement, while remaining fully compliant with MiCAR and PSD2/EMI regulations.
4. Use cases: remittances, payroll, and cross-border payments
- Instant remittances: New money remittance businesses can provide non-EU migrants with near-zero-fee, 24/7 transfers via LN, outperforming legacy money transfer operators.
- Digital payroll: Companies can pay remote freelancers in stablecoins, receiving instant settlement with protection against local currency volatility.
- Programmable payments: LN enables conditional and automated payments, facilitating supply chain settlements, recurring invoices, and DeFi integration.
Simon Consulting Insight: The key innovation is combining regulated stablecoins with high-speed decentralised rails. Firms that master this integration will dominate cross-border payments and programmable money ecosystems.
5. Key takeaways
- Layer 2 infrastructure is essential for scaling stablecoins to mass adoption.
- Regulated assets on decentralised networks combine legal compliance with technological efficiency.
- Lightning Network adoption is accelerating, with Speed Wallet and Joltz proving the model.
- Any compliant stablecoin, whether USDT, USDC, EURC, EURQ, or the 2026 euro consortium coin, can leverage LN for instant, global, low-cost transfers.
In the next article, we’ll synthesize the future of money, examining CBDCs, Euro stablecoins, programmable value, and the ultimate horizon for digital finance.
