Tether Will Soon Allow Direct Redemption of USDT — But With a High Minimum

Tether is launching a new liquidity portal, one that will finally allow the direct redemption of Tether’s stablecoin USDT back into fiat.

According to a new report released on the company’s website, Tether is going to “launch a redesigned platform allowing for the verification of new customers and direct redemption of Tether to fiat.”

One of the most successful stablecoins available on the market, Tether’s current market capitalization is $1.8 billion. Originally founded in 2014, Tether has seen wide adoption compared to other prominent cryptocurrencies as a popular trading hedge on the industry’s myriad exchanges.

There was just one problem with their model, however, in that there was a serious level of opacity regarding their actual fiat reserve. Although a customer could freely change fiat into Tether tokens at a variety of exchanges, there was no way to get fiat back.

This prompted speculation into Tether’s business practices, as skeptics wanted to know if there was any concrete way of ensuring that one unit of tether would always be worth $1 USD. Tether terminated its relationship with its first group of official auditors, and it was only later that a law firm could confirm the existence of a cash reserve.

This independent examination, however, was not an actual professional attestation or audit per se, but rather what was termed a “transparency report.” This state of affairs was still sufficient for many exchanges, which allow users to simply exchange fiat for Tether, but the company still has many skeptics. 2018 has been a breakout year for stablecoin projects, in an ostensible effort by competitors to provide a regulated, fully transparent alternative.

Now, however, Tether seems willing to dip their toes into the pool of free exchange between USDT and fiat. This new announcement allows for the first actual exchange in the other direction, albeit with a significant caveat: it is “designed with Tether’s professional investor audience in mind.”

In other words, the lowest amount you can exchange at one time is a cool $100,000. The fees associated with these transactions start at 0.04 percent or $1,000, whichever is larger; transactions exceeding $10 million come with a 3 percent fee for fiat withdrawal.

Opening up this liquidity portal may satisfy some skeptics, but the $100,000 minimum is sure to cause a stir within more critical communities.