Bitfinex today launched new functionality that allows users to trade its flagship stablecoin Tether (USDT) on margin, letting traders execute trades with borrowed money, with more trading pairs set to be announced in the future.
The anticipated functionality on the USDT/USD pair enables users to maximize their trading power and tap into idle funds for a better value, says the exchange. Although Bitfinex didn’t state the leverage ratio, or what it explicitly disallows, crypto margin systems often allow for both long and short positions, in addition to providing margin funders with an opportunity to earn interest on provisioned funds.
Bitcoin’s biggest exchange outlined that leveraged trading will be limited to USDT/USD, but promised to activate this feature for other stablecoins pairings once it secures sufficient liquidity.
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Moving Away From Reliance on Tether
Earlier this month, Bitfinex, together with its sister exchange Ethfinex, added four new stablecoins to the mix, including Gemini Dollar (GUSD) and USD Coin (USDC). The controversial move was seen as the first step to break away from its long association with the Tether stablecoin, a relationship that has driven conspiracy theories.
Bitfinex’s decision to move away from a reliance on Tether is part of a growing trend among exchanges. Binance also has added many non-volatile coins to its platform over the past few weeks, most recently supporting PAX tokens, and removing USDT as the sole reference stablecoin.
Adding to its woes, Bitfinex was recently subject of scrutiny by the US regulators who asked the exchange to provide more information about Tethers, which are tokens backed by US dollar deposits, as the two entities share the same CEO, Jan Ludovicus van der Velde. The CFTC also fined Bitfinex $75,000 in 2017 for offering illegal off-exchange commodity transactions without being registered as a futures commission merchant.