Lightning Network in 2025: Stablecoins, Taproot, Growth

Ever since 2015, when Thaddeus Dryja and Joseph Poon first introduced the Lightning Network concept, the ecosystem has seen consistent growth. This evolution can be seen in the number of apps, platforms, and merchants that now utilize the off-chain protocol to reduce transfer costs and improve performance.

This year has followed this trend, marking several major milestones for the world’s most popular Bitcoin scaling solution. Here are the major developments that have helped the LN continue to trailblaze Bitcoin adoption and daily usage.

The Lightning Network Supports New Features

The Lightning Network pushes the boundaries of Bitcoin’s capabilities, enabling the cryptocurrency to provide enhanced features and services akin to those of later-generation blockchains. For example, it enables Bitcoin to handle smart contracts, opening the door for several interesting developments.  The recent Taproot Assets upgrade enabled Bitcoiners to create and transfer multiple types of digital assets, including NFTs (non-fungible tokens) and stablecoins.

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NFT and Stablecoin Support via Taproot Assets

The ability to create and trade NFTs on the Lightning Network has resulted in an influx of Bitcoin-backed assets and marketplaces going live. Protocols like Bitcoin Runes and BRC-20 tokens leverage the validity and history of Bitcoin alongside the technical advantages the Lightning Network brings to the table.

Stablecoins

Specifically, the Taproot Assets upgrade opens the door for Bitcoin-backed stablecoins to gain popularity. The upgrade made it possible to issue and store these tokens directly. Notably, stablecoins on the LN network will help to drive adoption as they are easier for the average consumer to understand since they come in traditional fiat currency denominations.

In January, Tether, the world-leading stablecoin, announced that it would start supporting the Lightning Network. This maneuver signaled the start of Bitcoin-backed USDT. Notably, the maneuver can be seen as a vote of confidence for the Lightning Network and could lead to potentially millions of new users.

Additional Splicing Performance

Splicing is another powerful new feature that was recently upgraded. This feature smooths out transactions by enabling channel restructuring during the transaction. The term splicing comes from the ability to splice funds into the new account. This upgrade eliminated the need for some users to open multiple channels for larger transactions. Now, they can avoid the added channel fees and delays associated with opening and managing them.

Consolidation of Routing

Interestingly, the LN network continues to experience a consolidation of channels. While this reduction in channels may seem like a negative event, it’s a sign that the network is growing and becoming more established. You can see these details when you examine the other crucial data, which reveals that people have turned towards more established and higher volume channels, demonstrating further maturity.

Bitcoin Lightning Network Withdrawal Volume is Up

While the number of channels was consolidating into quality options, the number of times people utilized the Lightning Network was on the rise. This year, Bitcoin Lightning Network withdrawal volume saw major growth as more people than ever used the off-chain protocol to get funds to and from their favorite platforms, merchants, and exchanges.

Why Did the Lightning Network Grow in 2025?

Aside from the technological improvements, there are several other factors that have helped to push Lightning Network adoption forward recently. For example, the list of platforms that now integrate the system has grown significantly. Here are some notable integrations for 2025.

Bitcoin Well

In April of this year, the non-custodial Bitcoin portal, Bitcoin Well, integrated the Lightning Network with great success. The Bitcoin Well combines the best features of Bitcoin with many modern banking amenities, with the goal of helping drive adoption and streamline daily Bitcoin use.

Coinbase Integrated the Lightning Network

North America’s largest crypto exchange, Coinbase, integrated the  Lightning Network in March 2025. The CEX decided to add the off-chain protocol after several competitors had already made the move, prompting interest from their clients. Coinbase is a publicly traded corporation that has helped drive crypto adoption for years and currently has millions of active users. Notably, the platform reported that the Lightning Network was used for +15% of all Bitcoin withdrawals since its integration.

BitGo and Voltage

April of this year was good for the Lightning Network, which also had BitGo and Voltage Partner to Launch Instant Bitcoin Payments via the Lightning Network. This integration brings the Lightning Network to enterprise clientele. Impressively, it marks the first time a US institutional custodian has partnered with an off-chain protocol. As such, the move was seen by many as a sign that the ecosystem was pushing for new heights.

Bitcoin Only Brewery

The EU-based Bitcoin Only Brewery continues to quench thirsts across the EU. The company was made famous as one of the first Bitcoin-centric establishments. Now, the owners want to take their concept even further. Their decision to integrate the Lightning Network has helped to lower costs and improve Bitcoin awareness.

Notably, the LN integration was made possible via a strategic partnership with LN-powered payment processor Flash. Flash isn’t alone in its quest to improve Bitcoiners’ bottom lines. Numerous other processors have begun using the Lightning Network to reduce fees and improve performance. Even Square announced that it will begin an institutional rollout of the 2cd layer protocol in the coming months.

Steak ‘n Shake

You can now use the Lightning Network to pay for your favorite treats at your local Steak ‘n Shake. The company’s millions of customers across the US can utilize a simple LN-powered BTC QR code to send payments to the fast food giant directly. Best of all, this decision reflects the company’s belief that Bitcoin can be a viable payment solution for daily expenses as well as a store of value.

US Pioneering LN Adoption

There are many regions in the world where the Lightning Network has seen added adoption. Notably, the US continues to take the crown in terms of adoption rates. Major firms like Coinbase and Steak n’ Shake have helped to drive adoption and build consumer confidence in the Lightning Network.

Africa Supports the Lightning Network

Africa is another strong supporter of the Lightning Network. Nigeria, in particular, has become a Bitcoin-friendly economy. There are several organizations and companies that utilize the Lightning Network to provide helpful services such as low-cost remittance and investment options. Here, Bitcoin provides an escape from crushing inflation and other local economic woes.

Latin America Relies on the Lightning Network

Few places in the world have shown the level of support for the Lightning Network found in South America. This region was the first to have a country recognize Bitcoin as legal tender and remains a hotspot for crypto activities and tourism. Places like Bitcoin Beach in El Salvador cater to Bitcoin users and educate the masses.

Today, Latin America is one of the strongest supporters of the Lightning Network due to its integration into everyday life. Citizens from across the continent have used cryptocurrencies to help fight inflation and secure their wealth, even in the most uncertain financial times.

Play-to-Earn Gaming on the Lightning Network

Another factor that has helped drive Lightning Network numbers upwards recently is the increase in Bitcoin-powered gaming. The Play-to-Earn sector enables gamers to transform their efforts into profits via transferable and tradable digital assets. The Lightning Network is the ideal solution for Bitcoin-related games as they require microtransactions and instant payments.

The skill-based game, Glitch, is a perfect example of a Bitcoin-powered game that has gained popularity. This digital blackjack allows users to secure their winnings or load their account using the Lightning Network. This decision helped the platform gain momentum during its launch and continues to make it a draw for Bitcoiners seeking some gaming excitement.

Regulatory Support

Another driving factor for the Lightning Network movement is the recent change in attitude of lawmakers. Before this administration, cryptocurrencies were often described as scams. However, many lawmakers have taken the time to learn about these assets, and now, they have embraced them.

You can see this shift in attitude via SEC appointments and other crucial government officials being supportive of the technology. It now appears that the government wants to support blockchain innovation, which is driving integrations.

Future Prospects For the Lightning Network

The Lightning Network opens the door for unique opportunities that can expand Bitcoin’s capabilities and use cases. Notably, there are several upgrades being discussed at this moment. Already, the community is debating the OP_CAT, OP_CTV, and Eltoo upgrades as a means to enhance performance.

Is the Lightning Network Still the Way Forward for Bitcoin as Cash?

There is still a lot of work to be done before the Lightning Network can handle the type of volume required for large-scale adoption. However, that doesn’t mean that it hasn’t been trucking in that direction for years. If anything, the first six months of 2025 demonstrated these movements and show the world that the Lightning Network is here to stay.

You can learn about other cool crypto updates here.