Dollars and bitcoin

Quick scan. Confidence: medium on the market, low on merchants’ reasons. Last updated November 9, 2026.

The question

Stablecoins are winning payments. Bitcoin builders hear it from merchants directly; merchants told one builder to “support USDT or go away” (quoted by Spiral). What do merchants and users actually mean when they ask for USDT? And how should bitcoin wallets handle people who want dollars: ignore it, display dollars, swap at the edges, or hold dollars on bitcoin rails?

What’s happening

USDT on Tron is the default for stablecoin payments.

Artemis studied 31 stablecoin payment companies, a snapshot annualizing to $72.3 billion across business, peer-to-peer, consumer and card payments. USDT was 90% of payment volume, and Tron carried about 60% (Yahoo Finance, May 2025). Dragonfly’s Rob Hadick said payment firms care little which chain settles, since Tron is fast and cheap, and that Tether is a trusted brand in places like Argentina and Brazil, where people worry about bank failures.
Earlier scans found the same pattern for income: stablecoins were over 90% of crypto salaries in 2024 (area 12).

Stablecoins can be, and are, frozen. Tether froze more than $514 million in USDT across 370 addresses in the 30 days before May 8, 2026, about 98% of it on Tron. In 2025, 4,163 addresses were blacklisted with $1.26 billion frozen (Cointelegraph on BlockSec data). Most freezes target illicit activity, but the power is the issuer’s.

Dollars are arriving on bitcoin rails.

Lightning: Tether announced USDT on bitcoin and Lightning through Taproot Assets in January 2025 (The Block). It went live in March 2026, but the ecosystem is “still nascent,” mostly LND-based, with early adoption through Speed Wallet and LnFi; the report gives no volumes (Spark research).
Ark: Tether backed Ark Labs’ $5.2 million seed round in March 2026 to expand stablecoin support on Arkade, the other main Ark implementation (The Block). As of November 2026, Second hasn’t announced plans for stablecoins in Bark. [to verify]
Bitcoin wallets with a dollar balance: Blink offers a Dollar Balance, custodial through Stablesats or non-custodial with supported stablecoins (Blink). The Breez SDK offers a “stable balance” that converts received sats to a stablecoin (Breez SDK docs). Wallet of Satoshi added stablecoins to its self-custodial version, in beta from July 2026 and switched on in September, according to secondary reports (Coin-Turk, Stacker News). [to verify: official Wallet of Satoshi announcement]

Say versus do: merchants say “support USDT.” What they do is settle in USDT on Tron, mostly through payment companies, without caring much about the chain. That suggests they want stable dollars their counterparties already use, not USDT as such. Nobody has asked them directly what would make them accept something else.

Who

Group	What they want	Notes
Merchants and sellers in emerging markets	Stable value, the currency their customers and suppliers already have	The “support USDT” voice; reasons not yet researched
People saving in weak-currency countries	Dollars that a bank can’t fail on	Tether as a trusted brand (Argentina, Brazil)
Earners paid in stablecoins	Dollar income, sometimes with some bitcoin	Area 12
Bitcoin holders paying people who want dollars	Pay in bitcoin, recipient gets dollars	Swaps at the edge

What could serve this

Kinds of product

Wallet stances toward dollars (below).
Swap services between bitcoin and stablecoins or local money (Boltz, SSPS providers; area 18).
Merchant tools that accept one currency and settle in another.
Pricing tools: displaying local currency and locking rates in invoices and orders.

Trade-offs for wallets

Four possible stances for a bitcoin wallet, from purest to most flexible:

Bitcoin only: amounts in sats or ₿, nothing else.
Dollar display: show prices in local currency, and lock the rate when an order or invoice is created. No dollar holdings.
Swaps at the edges: hold bitcoin, but pay someone who wants stablecoins, or get paid by someone who only has stablecoins (SSPS points this way, see area 18).
A dollar balance: hold dollars on bitcoin rails (Taproot Assets on Lightning, stablecoins on Ark), next to bitcoin.

The design problem is real at every step: two currencies in one wallet, without confusing people about what they hold.

Risks

Issuer risk: stablecoins bring back an issuer who can freeze funds, which undercuts self-custody.
Regulation: stablecoin rules (GENIUS Act in the US, Brazil’s settlement ban) change quickly.
Immaturity: dollar rails on bitcoin are early, with few wallets and little liquidity.
Identity: for wallets built around bitcoin, adding dollars can blur what they stand for.

Open questions for a deep dive

When merchants ask for USDT, what do they need: stable value, their counterparties’ currency, a dollar savings account, or simplicity? (Interviews and money-flow mapping.)
Would swaps at the edges satisfy them, or do they need to hold dollars?
How do people react to frozen stablecoins? Does it change behavior?
Which dollar rails on bitcoin will actually have liquidity in 2027: Taproot Assets, Arkade, Spark, or others? For a bitcoin-only wallet, which of them can it swap with at the edges?
What do bitcoin wallets that added dollars (Blink, Speed) see in usage: do people move into bitcoin over time, or stay in dollars?