OpenLedger, the suit of services built on the BitShares 2.0 fintech platform, is to add support for Tether to its exchange, so its traders can send and store money without being hampered by volatility.
Cryptocurrencies are notorious for their lack of stability, with exchange rates fluctuating markedly over the course of even a day. As such, blockchain can transfer value but remains a poor way to store it. This has given rise to a number of different solutions, including BitShares' SmartCoins, which operate via a decentralised peg, and OpenLedger's own OPEN.USD, OPEN.EUR and OPEN.CNY, which are tokens backed by funds held with the platform's de facto fiat gateway, CCEDK, said a statement.
Tether uses a "currency board" system, similar to nations that peg their currencies to other fiat currencies. Funds are held in a fully audited, insured bank account, with an equivalent number of crypto coins issued, each representing one dollar (USDT). Tether holds funds centrally, but backed tokens can be transferred on the blockchain in a completely decentralised manner. This hybrid system means that USDT – which is 100% backed by $3m of fiat reserves – has all the liquidity of the US dollar whilst leveraging the efficiency of the blockchain for fast, low-cost transfers, said OpenLedger.
OpenLedger is now expanding its existing options, which include BitShares' SmartCoins and its own OPEN.xxx currencies, with Tether functionality. Customers can purchase and use OPEN.USDT and OPEN.EURT, redeeming them for fiat from CCEDK at a 1:1 ratio, minus a small commission fee.
OpenLedger CEO Ronny Boesing said: "This is a good complement to our existing blockchain-based currencies. Volatility has always been a problem with cryptocurrencies, proving a significant barrier to adoption.
"Giving customers ways to store and send funds without being exposed to these exchange risks is a game changer, and positions OpenLedger very well for continued expansion as more and more companies and individuals wake up to the potential of blockchain technology."
Boesing believes this development has further implications for the family of companies and services that make up a mutually-beneficial ecosystem. This includes likes of OBITS, BitTeaser and ICOO, which all stand to gain from the addition of USDT, he said.