Tether Transfers $15M Into Semi-Private Stablecoin USDT Liquid, Why Is This A Big Deal?


Tether, a stablecoin issuer implemented a cross-platform swap of $15 million worth of Tether to Liquid, operated by Blockstream from Ethereum. Liquid is a federated sidechain which runs parallel to the BTC blockchain. The possibility of debuting USDT’s Liquid was first considered in Mid-2019.

While this transfer is at first glance quite harmless, the reality is that it’s a move that has far-reaching consequences. Its effects are bound to be felt by the bigger tether market as well as by those taking part in digital assets trading. In the course of the last year, a similar move saw enthusiasts migrating in large numbers from Omni to Tron and Ethereum.

What Does Liquid Provide?

Liquid is well-positioned to provide Privacy. By using confidential assets, there’s a chance that Tether may not be able to see any public light ever again. Confidential assets are a tool designed to enhance privacy by blinding the value of assets through the use of a protocol referred to as confidential transactions. According to Grubles, a pseudonymous Blockstream community manager:

“By hiding tether transfers between off-exchange accounts on Liquid and exchanges themselves, traders can move assets around without worrying about frontrunning.”

For instance, traders can transfer Liquid-based tether to a given cryptocurrency exchange with the sole purpose of purchasing BTC without letting others know about the real intentions as they may interfere with the trade causing the prices to increase before the transaction is complete.

It’s generally possible to track tether movements, especially when the movements involve transferring tether from one crypto exchange to another. This kind of information is quite valuable by itself. Traders can rely on this movement information when executing trades. Grubles went on to add that:

“Moving from a blockchain that has transparent transactions and onto Liquid is somewhat of a no-brainer in the context of trading.”

Tether has so far managed to maintain a competitive edge against all the other stablecoins available in the global market. At the moment, it has close to 75 times more trading volume compared to its closest competitor.

Taking into account its universal usage in the global marketplace, its association with privacy only helps to enhance its overall competitive edge.

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