Tether Limited, the leading provider of tokenized traditional government-backed currencies, today announced in partnership with Ethfinex, the launch of Tether ERC20 tokens on the Ethereum blockchain.
This partnership would enable tokenized US dollars to be exchanged on the Ethereum network for the first time. Ethfinex is a newly born decentralized Ethereum ecosystem spin-off from Hong Kong cryptocurrency exchange Bitfinex.
Launched in 2014, Tether was the first blockchain-enabled platform to allow traditional currencies to be tokenized, allowing users to transact with fiat currencies across the exchange without the relative volatility associated with digital currencies.
Tether users deposit US dollars, and soon Euros, Japanese Yen, and other fiat currencies which are converted into a 1:1 backed digital currency called tether ₮. Each Tether then carries a name and symbol of the underlying asset it represents and is transferable and tradeable as a standard ERC20 token.
Craig Sellars, Co-founder of Tether, said:
“Following the success of our widely used US Dollar tokenization on the Bitcoin blockchain, this latest version enables interoperability with Ethereum-based protocols and DApps. We believe this new development will reduce the current interbank delays often involved in exchange withdrawal and allow our users access to tokenized USD – a first for the industry.”
“We believe this development will not only open up the world of cryptocurrencies to more mainstream consumers, but also set the standard, and encourage other companies to be more innovative and accessible in their product and service offering at this pivotal time for money and payments.”
Partnering with Tether by creating the smart contracts is Ethfinex, which aiming to be a trading and information hub for projects on the Ethereum blockchain and is set to offer access to a highly liquid and advanced trading platform for ERC20 tokens.
Will Harborne, Project Lead at Ethfinex said:
“The number of tokens and assets being tokenized on top of the Ethereum platform is growing rapidly, with many proving disruptive to traditional business models. By enabling all ERC20 compatible applications and protocols to integrate tokenized USD, we expect to see enhanced efficiency and further stability on the Ethereum network.”
Integrating with Tether as a compatible application is TokenCard, a smart-contract powered debit card and Ethereum gateway founded in 2016. Upon launch of their card, TokenCard will accept the Tether ERC20, enabling their users to use tokenized fiat currencies for everyday transactions.
TokenCard Co-founder Mel Gelderman said:
“The launch of Tether fiat tokens on the Ethereum network is a huge step towards mass consumer adoption. This blurs the boundaries of what is considered a blockchain asset versus a ‘regular’ asset and will enable people to own the fiat currencies most familiar to them but in a tradeable digital form.”
“This will make it much easier for the majority to use Ethereum powered platforms, like TokenCard. The option of choosing TokenCard over traditional banks becomes even easier if a national currency can be held in token form. The strength and versatility of the Ethereum blockchain enable a safe and secure means of transferring funds anywhere in the world without needing to use a bank of any kind.”
Tether is supposed to hold 1:1 reserves for all Tether generated in its contract where each tether is backed by its corresponding currency on deposit. A total list of balances issued to all Tether can be viewed, verified and checked against the on-chain deployments of Tether contracts by any interested party.
Tether will be fully transparent and audited to demonstrate 100% reserves at all times, and these reports will be published and communicated on the Tether website.
To view the full contract security review, visit https://stableset.com/audits/tether_audit_v1/tether_audit_v1.pdf