Stablecoin Wars: Bitfinex Adopts ‘Neutral’ Stance & Lists Major Tether Compeitors
Written by Urban on December 5, 2018
Users of crypto exchange Bitfinex and its associated token-trading platform Ethfinex now have a total of six stablecoin options for trading on either platform.
Bitfinex Opens Platform to Tether Competitors
As Bitfinex writes, for years the only major option in stablecoins was Tether (USDT), and for quite a while Bitfinex was the only way to cash in your Tether successfully – you’d have to pay Bitfinex withdrawal fees, but they offered a 1:1 redemption which they recently revoked, spurring Tether to reinstate its own redemption program complete with a questionably high fee schedule.
“At Bitfinex and Ethfinex we are dedicated to providing a high quality, unbiased meeting place for every ecosystem and customer. We were the first to introduce alternative stablecoins onto our platform, including Dai (an Ethereum collateralised stablecoin), and now proudly introduce the following established stablecoins: USDC, True USD, Paxos, and Gemini USD. All stablecoins on Bitfinex and Ethfinex will be traded against USD.”
In addition to Tether, USDC, and Paxos Standard, which everyone seems to be integrating, both exchanges also offer Dai, a very different type of stablecoin built on Ethereum, as well as TrueUSD and Gemini Exchange’s GUSD. This last addition is notable in that Bitfinex is one of the first major exchanges other than Gemini to enable usage of it, likely leading to increased adoption of the Winklevoss Twins’ stablecoin entrant. We should also note that they offer EURT, the Euro version of Tether.
While in past times using USDT meant that you had a guaranteed 1:1 dollar ratio at Bitfinex, now they will have varying (albeit quite small) rates according to supply and demand. Seemingly microscopic arbitrage opportunities will thus be created across stablecoins and currencies. On occasion, one will be able to buy one of these stablecoins for less than the dollar it costs through its issuer, and sell it back for slightly more at a later date. This strategy isn’t really profitable for those with small portfolios, but large and institutional investors will recognize the potential, and the move by itself is likely to stimulate renewed volume at Bitfinex and Ethfinex.
The Era of the Stablecoin
The Stablecoin market is very new despite Tether having been around for several years, in that there are an increasing number of offerings which have most of the same properties. Paxos, Gemini, and USDC all offer free exchanges between the dollar and the token, which is important for those trying to gain traction in their crypto trading career.
It can be expected that just as hundreds upon hundreds of altcoins and later tokens came to market, there will be an increasing number of stablecoin offerings, especially as traditional finance goes more and more crypto. Exchanges like Bitfinex appear ready to support anything their customers might use, while others such as Binance appear more reluctant to add stablecoin tokens without significant demand.
What we have yet to see but expect to see is the advent of Asia-specific stablecoins for currencies like the Chinese Yuan and the Japanese Yen. Such additions will essentially enable crypto traders to have a global reach and the ability to get from one continent to another in terms of financial liquidity with less effort than ever before, which will enable new types of payment platforms that had not previously been possible, even with the existence of Bitcoin.