Lightspark Partners with Cross River Bank to Enable Real‑Time Fiat Settlement of Bitcoin Payments
The collaboration links Lightning Network transactions with the U.S. FedNow service, aiming to turn Bitcoin into a viable everyday payment rail for businesses and consumers.
SAN FRANCISCO, Feb 18 2026 – Lightspark, the Bitcoin Lightning Network startup founded by former Meta executive David Marcus, announced a strategic partnership with Cross River Bank, a crypto‑friendly, FDIC‑insured institution that already provides banking services to major players such as Circle and Coinbase. The joint effort will allow merchants and enterprises to settle Bitcoin payments in U.S. dollars almost instantly through the Federal Reserve’s FedNow real‑time payments infrastructure.
How the partnership works
- Lightning‑first processing: Lightspark will continue to route payments over the Lightning Network, the layer‑2 solution that enables low‑latency, low‑fee Bitcoin transfers.
- Fiat settlement via Cross River: Once a Lightning transaction is confirmed, Cross River will handle the fiat side, moving the corresponding U.S. dollars through FedNow and other faster‑payment rails.
- Target markets: The service is aimed at B2B, cross‑border, and retail use cases where immediate settlement can materially improve cash‑flow management and reduce the need for intermediary holding periods.
“By bridging Bitcoin’s settlement speed with the FedNow system, we are creating a truly instant, end‑to‑end payment experience,” said Marcus in a statement released with the announcement. “Customers can move value on Bitcoin and have the equivalent dollars in their bank account the same day, every day.”
Context: Lightning Network activity
The Lightning Network has demonstrated growing utility despite a relatively modest total value locked (TVL) compared with Ethereum layer‑2 solutions. As of early 2026:
| Metric | Recent figure |
|---|---|
| Network capacity (peak 2025) | ≈ $1.4 billion |
| TVL (DefiLlama) | ≈ $338 million |
| Monthly transaction volume (Nov 2025) | $1.17 billion |
| Number of transactions (Nov 2025) | 5.2 million |
| Avg. transfer size | $223 |
These numbers show the Lightning Network is handling a significant volume of micro‑payments, though most activity still revolves around moving funds between exchanges rather than direct consumer purchases. The concentration of node infrastructure is also notable: more than 40 % of Lightning nodes are hosted on Amazon Web Services or Google Cloud, with AWS alone accounting for over a quarter of total node power.
Strategic implications
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Bridging the retail gap – By offering real‑time fiat conversion, Lightspark and Cross River address the chief criticism that Lightning is “settlement‑only” and not yet merchant‑friendly. Faster access to dollars could make Bitcoin‑based point‑of‑sale solutions more attractive to retailers that currently rely on card networks or stablecoin bridges.
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Cash‑management advantage – Companies with tight working‑capital constraints stand to benefit from same‑day settlement. Instant conversion eliminates the float that typically occurs when crypto payments must be held, converted, and then deposited.
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Regulatory comfort – Partnering with an FDIC‑insured bank and using the FedNow system may assuage concerns from regulators and institutional partners who have been wary of opaque crypto‑to‑fiat pipelines.
- Competitive landscape – The move positions Lightspark against other fiat‑on‑ramp solutions that use custodial stablecoins or traditional card processors. Its differentiator is the ability to keep the settlement layer on Bitcoin while still delivering fiat liquidity instantly.
Potential challenges
- Liquidity provisioning: Sustaining the fiat side of the bridge will require robust liquidity buffers at Cross River, especially during periods of heightened market volatility.
- Dependence on FedNow: While FedNow enables 24/7 settlement, any operational outage or regulatory change to the service could affect the Lightning‑Fiat flow.
- Node centralization: The concentration of Lightning nodes on a few cloud providers may raise questions about network resilience and censorship resistance, factors that could impact broader merchant adoption.
Key takeaways
- Instant Bitcoin‑to‑dollar conversion: Lightspark’s Lightning Network routing combined with Cross River’s FedNow settlement creates a near‑instant fiat payout mechanism.
- Focus on B2B and retail: The partnership targets use cases where same‑day settlement improves cash flow, including cross‑border trade and point‑of‑sale environments.
- Infrastructure backdrop: Lightning’s transaction volume continues to rise, but its primary use case remains exchange‑to‑exchange transfers; this partnership seeks to shift that balance toward everyday commerce.
- Regulatory and operational safeguards: Leveraging an FDIC‑insured bank and a government‑run payments system may lower compliance hurdles for businesses adopting Bitcoin payments.
If the Lightspark–Cross River model proves scalable, it could represent a pivotal step toward positioning Bitcoin not just as a store of value but also as a practical medium of exchange for routine transactions. The industry will be watching closely to see whether instant fiat settlement can finally unlock the retail potential that has long been promised by the Lightning Network.
Source: https://thedefiant.io/news/defi/lightspark-teams-up-with-cross-river-bank-for-fiat-payments-via-bitcoin
