USD-Backed Crypto Tether Re-Enables Direct Withdrawals of Fiat

tether withdrawal usdt crypto
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Following an announcement from Bitfinex yesterday regarding their newfound “neutrality” to tether (USDT) and intent to use other stablecoins in addition to USDT, crypto firm Tether has revived its former business model of enabling 1:1 redemption of USDT for USD on its own platform.

“Now, thanks to stronger banking as a result of our new relationship with Deltec, Tether is able to return to its original vision of having a wallet for creating and redeeming directly on its own platform without having to rely on a third party. This update allows the immediate withdrawal of Tether to fiat (1:1), with the ability to acquire coming soon.”

Users who want to cash out USDT at Bitfinex will do so at market rates, rather than 1-for-1, right along with the other stablecoins that are being offered. As we’ve reported in the past, tether occasionally divorces from its dollar peg due to market pressures, sometimes by as much or more than five cents.

Tether also published a rate card regarding the deposits and withdrawals of fiat currency on the platform. To use Tether’s withdrawal system directly, clients will need to be working with more than $ 100,000, at which size they are charged 0.1% to make a fiat deposit or the greater of $ 1000 or 0.4% to withdraw. Customers of any size may only make one fiat withdrawal per week. Transactions over $ 1 million are charged a 1% fee while those over $ 10 million are charged a whopping 3% – or a minimum of $ 300,000. Deposit fees are flat, however, at 0.1%, no matter the size.

Traders looking to realize gains will have to determine the best route to do so. There is no fee for moving USDT in and out of one’s official Tether account, so traders will have to develop strategies to maximize the utility of the fee structures at the dozens of places they could potentially exchange their tokens for dollars and/or other cryptos.

On the other hand, newcomer Paxos Standard (PAX) charges no fees. Withdrawals are not instant due to the way Paxos works, but they happen on a regular schedule which is published by the company. They also reserve the right to change their fee structure at any time. Similarly, Circle’s USD Coin (USDC) does not charge a fee for withdrawals. Both it and Paxos have a minimum of $ 100 for conversions.

Interestingly, on Binance at time of writing, Paxos Standard was trading at a premium against USDT, meaning that a user who wanted to convert from USDT to Pax in order to avoid fees would essentially do so at a 1% fee plus exchange fees. Seems anyway you go, with tether, you’re going to pay.

Featured Image from Shutterstock.

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