Lightning Labs has been working on a project they call Taproot Assets. It is a colored coin protocol that imbues UTXOs with additional meaning that is tracked via client-side validation. The assets are committed to in a leaf of the script tree of P2TR outputs that does not need to be published, but whose existence and entire history is tracked out-of-band by those interested in the asset.
LND can create Lightning Network channels denominated in such assets. If a channel participant of the asset channel additionally has other Bitcoin-denominated channels open and offers to trade the asset for bitcoins, the other channel participant can receive asset-denominated payments that were sent out as bitcoin-denominated payments in the Bitcoin-denominated part of the Lightning network, or vice versa, pay the asset to effect Bitcoin-denominated Lightning payments to other Lightning Network users.
