Bitfinex to Leverage Tether for Blockchain-Backed Fiat Transfers

Bitfinex has partnered with Tether, a platform using a blockchain to transfer fiat currencies, for client use on its exchange.

Bitfinex has partnered with Tether, a platform using a blockchain to transfer fiat currencies, for client use on its exchange.

Currently, the “Tether” unit of currency is used on a one-to-one basis to represent USD. There are future plans to add support for the yen and the euro.

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Bitfinex has been gradually re-engineering each component of its operation, recently partnering with AlphaPoint to rebuild its backend. On Bitfinex’s latest move, Tether co-Founder and CEO Reeve Collins said, “This integration with Bitfinex is the first step into a world where traditional currencies move like bitcoins. Dollars have now inherited the portability benefits of cryptocurrency.”

Tether says to come with “almost zero conversion and transfer fees” and is redeemable at any time.

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A spokesperson for Bitfinex explained their rationale for the move:

“We see Tether as a significant optimization for the problems that plague bitcoin traders and exchanges when interfacing with the traditional banking system. We proudly support Tether and encourage other exchanges, OTC traders, and arbitrageurs to also use Tether. We believe that widespread adoption of a secure Blockchain-compatible ‘crypto-dollar’ will lead to better price discovery, market transparency and liquidity.”

Tether works differently from Bitcoin 2.0 protocols like Ripple and Stellar, which are also designed to transfer fiat currencies. Tether essentially uses its digital currency, which is transmitted through a blockchain, as a coupon for fiat.

The partnership is the latest example of bitcoin-based technologies being adapted toward traditional finance, a sustainable proposition independent of bitcoin’s future as a currency.

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