Lightning Labs announced a new protocol called "Taro" yesterday. Taro stands for "Taprot Asset Representation Overlay", a taproot enabled protocol that would support issuance of multiple assets on Bitcoin, and transferrable over the Lightning Network. In a blog post yesterday, they state "We see Taro as an important step in bitcoinizing the dollar, getting the best of both worlds by 1) issuing assets like stablecoins on the most decentralized and secure blockchain, bitcoin and 2) allowing users to transact on the fastest global payments network with the lowest fees, Lightning."
Regardless of your view of stablecoins and whether or not stablecoins are necessary on Bitcoin, there is true demand worldwide for USD pegged stablecoins, especially in the global south. The USD remains the most used currency, and many people in nations such as Argentina, struggling with 52% inflation seek dollars as a safe way to transact in a dollar dominated world. Well put by Lyn Alden in reference to this development:
And thats what Taro will seek to do, leverage the security of Bitcoin and the high speed and scalability of lightning to enable the transfer of assets such as stablecoins safely, easily, and at low cost. This won't necessarily stop at stablecoins, as it can enable the use of other assets on the network as well.
Just like every other proposal in Bitcoin, it will face arduous peer review just like any other. You can review the BIPs here.
Read more about how Taro works here.