Popular US-based cryptocurrency exchange Bittrex may be offering deposits in US dollars sometime in the not too distant future.
This comes after a relative torrent of allegations and suspicion have been aimed at Tether, which for many exchanges have been acting as a stand-in for dollars. If Bittrex adopts the US dollar, then Tether could find itself quickly becoming obsolete.
Bittrex to accept US dollars
In an interview done in the UnikrnRadio podcast, Bittrex CEO Bill Shihara made several comments alluding to the possibility of Bittrex accepting dollar into accounts. If this were to come true, there could be several large impacts on the cryptocurrency world as a whole.
For instance, this could make Bittrex a viable competitor to Coinbase when it comes to direct US dollar to cryptocurrency purchases. This is because not only could investors purchase bitcoin and Litecoin, they could potentially buy any asset listed on Bittrex for dollars. It is also conceivable that Bittrex could offer this service for what amounts to a much lower fee than what the incumbent Coinbase currently charges.
Additionally, allowing users to hold dollars in their accounts could have a strong impact on how Tether (USDT) is used on the exchange.
What is Tether?
Tether (USDT) is a cryptocurrency group that offers a token, the USDT, that is designed to represent the value of the US dollar. The company claims that all Tether units are fully backed by US dollar cash reserves. They also claim that their service is entirely auditable so that users can verify that Tether is not creating new tokens without having a corresponding US dollar deposit held.
Tether is often used on cryptocurrency exchanges as a way for traders to lock in gains made against the dollar. For example, a trader might buy some bitcoin at a low price, and then sell it at a high price for Tether, and so on. The value of one Tether unit rarely deviates by more than one cent from the US dollar.
Allegations against Tether
Tether has recently faced a number of PR problems relating to another major cryptocurrency exchange, Bitfinex, and an anonymous whistleblower on Twitter known only as Bitfinex’ed have made numerous allegations regarding Tether and the exchange colluding to artificially manipulate the market.
There’ve also been claims that Tether has been creating units without appropriate US dollar backing.
Tether was also recently hacked and millions of units were created without approval. The company quickly responded, however, and the fraudulent units were essentially deactivated on the network.
To make things worse, Tether has received a subpoena from the U.S. Government and will likely face auditing in attempt to prove that they really do control the $2 billion or so odd dollars that they claim to have.
When speaking of Tether, Bittrex CEO Bill Shihara was vague and neither condemned nor promoted it. Instead, he simply noted that his organization simply treats it as another altcoin and he advises everyone to approach it with the same caution you would any other cryptocurrency project.
Will Bittrex offer US dollar deposits?
While it’s possible as the exchange certainly has the resources to pursue it, it is not guaranteed. This is because in order to qualify for a banking license in the US, numerous legal hurdles must be passed and that can take years if it happens at all.
Featured Image via Bittrex.com