Bitfinex Announces Tether Neutrality As The Crypto Reopens Direct Redemption Of Fiat
The team behind Tether announced that it will be reopening direct redemption of fiat from its platform. Interestingly, this is an indication that users will directly deposit and withdraw fiat from its platform. Further, the platform will begin allowing for account verification for new users.
This is a huge redesigning of the Tether platform, a stablecoin that opened the scene. Particularly, the crypto maintains a one-to-one parity with the US dollar.
Direct redemption of fiat on Tether affects trades on Bitfinex
Subsequently, Bitfinex, a cryptocurrency exchange, will maintain neutrality regarding the stablecoin. Particularly, users of the Bitfinex platform will easily trade Tether with fiat from the platform. According to a statement from Bitfinex, the exchange added USDT/USD and EURT/EUR combinations.
Initially, users were able to convert withdrawals and deposits on a 1:1 basis. According to the statement, the addition of the new trading pairs increases the “range of choice in the stablecoin market and demands from our consumers.”
Further, Bitfinex maintains that it provided a guarantee of the Tether/USD one-to-one parity to protect customers. Essentially, the guarantee ensured that the users could redeem their cryptos at any time.
Specifically, the decision to change the way users interact with Tether on Bitfinex was due to Tether’s redesign.
Back to the original vision
Interestingly, this redesign is something that Tether maintained earlier before changing the platform. Therefore, the platform is simply reverting back to a former business model.
In part, the Tether statement reads:
“Now, thanks to stronger banking as a result of our new relationship with Deltec, Tether is able to return to its original vision of having a wallet for creating and redeeming directly on its own platform without having to rely on a third party.”
Further, the statement notes that the stablecoin first changed its model due to the unprecedented growth of the cryptocurrency. As a result of the exponential growth, enabling direct redemption of fiat became unsustainable.
No changes to fiat balances
In this regard, Bitfinex also had to make decisions regarding Tether’s trading on its platform.
“In this environment, it made sense to take the stress off growing pains by flexing the existing model to harness the established infrastructure and security of Bitfinex, which was built to withstand a much larger volume of customers,” Bitfinex said in its statement.
However, Bitfinex insists that balances in the USD denomination will remain unchanged. Therefore, users should not worry of any changes on their fiat. Further, the exchange will officially initiate changes immediately after the 27th of November.