Tether Arrives on Blockstream’s Liquid Sidechain Despite Controversies

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According to an official statement released by Blockstream on July 29, Tether (USDT) will be now issued on Bitcoin’s sidechain Liquid Network under the name Liquid USDt, which is already available to be deposited or withdrawn on the Bitfinex exchange. 

Tether is Spreading

Despite the legal problems between iFinex Inc., the parent company of Bitfinex and Tether (USDT), and the New York Attorney General’s Office (NYAG) which claims that iFinex co-mingled funds to cover losses totaling $850 million, the development of the largest stablecoin in the industry is showing no signs of slowing down.

In fact, on July 29, Blockstream, a Canadian company focused on developing solutions related to Bitcoin, announced the integration of Tether (USDt) on to its federated sidechain, the Liquid Network. Compared to the original Tether protocol (the Omni Layer), Liquid USDt will enable faster transactions, confidential transactions and complex multisig security.

This is not the first time Tether has moved away from its original issuance protocol. Starting in March 2019, Tether has been integrated into multiple blockchains such as Ethereum, Tron, EOS, and might be soon integrated on the Bitcoin Lightning Network thanks to the RGB Protocol.

In particular, the latter possibility was confirmed recently by Blockstream CEO Adam Back, who said on Twitter that the technology can also support Lightning payments.

Implications

The spread of  Tether on various platforms certainly has positive effects with regard to exchanges and traders. Moreover, thanks to the recent development of the Liquid Swap Tool, a platform that allows companies to deploy tokenized securities and traders to execute atomic swaps, Liquid USDt will now be exchangeable with any other Liquid-based asset developed on the Liquid Swap Tool. Leveraging the Liquid Network will improve trader experience by eliminating the risk of trust in third-party services such as escrow services.

Liquid USDt is now available on Bitfinex for deposits and withdrawals but there are already various exchanges which expressed their interest in integrating the new asset including BTSE, BTCTrader/BtcTurk, OKEx, OKCoin, RenrenBit, and Sideshift AI. Once Liquid USDt will be integrated into different operators there will be faster arbitrage opportunities as traders will benefit from Liquid’s 1-minute block times to complete a trade between different exchanges.

Additionally, as the Liquid Swap Tool is a platform to launch securities – institutional traders will have the possibility to trade their securities against Liquid USDt, which is very close to traditional assets they are used to; this will eventually bring greater liquidity in the industry.

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