rewrite this title Tether Chooses Ethereum L2 Arbitrum for Cross-Chain USDT Infrastructure – Decrypt

Tether has picked Layer 2 Ethereum protocol Arbitrum to provide the infrastructure for its new cross-chain initiative, Legacy Mesh.

The news follows Tether’s launch of a new token, dubbed USDT0, in mid-January to facilitate smoother cross-chain transfers of USDT outside of blockchains that already support it. The aim was to do it without needing to use techniques like wrapping tokens or blockchain bridges.

USDT0 is pegged one-to-one with Tether’s flagship stablecoin, USDT. It’s currently the world’s largest stablecoin with a market cap of $141 billion according to CoinGecko. It runs on LayerZero’s Omnichain Fungible Token (OFT) standard, which has been used by other stablecoins such as PayPal’s USD stablecoin, PYUSD.

The Arbitrum blockchain will act as a “hub chain,” connecting the USDT and USDT0 networks. Through it, USDT deployments on Arbitrum, Ethereum, Tron, Ton, Ink, and Berachain will link back to a unified USDT0 network.

Steven Goldfeder, co-founder and CEO of Offchain Labs, which develops Arbitrum, said, “The Legacy Mesh is an important milestone for Arbitrum, ensuring that users and developers have access to deep, liquid markets regardless of the blockchain they are on.”

Tether has been on a roll since 2025 when it comes to increasing interoperability with other blockchains. Tether recently incorporated interoperability with Bitcoin via the Lightning Network at the end of January, following announcing the move at a Bitcoin conference in El Salvador.

The stablecoin issuer has also been reporting record numbers when it comes to its finances. Tether reported yearly net profits exceeding $13 billion in Q4, as well as a record amount of exposure to U.S. Treasuries.

But the financial success is coming amid plenty of scrutiny from regulators.

President Donald Trump’s pick for commerce secretary, Howard Lutnick, recently agreed to support the introduction of government audits for stablecoin reserves to prevent stablecoins like Tether from losing their dollar peg.

We’ve also seen Arbitrum provide the basis for numerous other infrastructure projects in recent months.

Bitcoin rollup layer BitcoinOS recently announced an integration with Arbitrum One, to bridge Bitcoins users and DeFi applications on Ethereum.

Edited by Stacy Elliott.