A Whitepaper for Square’s DEX Has Been Released


Square has released a whitepaper that details its ambitions for tbDEX, a new decentralized exchange.

Fiat Ramps Will Be Available Through Square’s DEX

The major purpose of tbDEX will be to make converting money between fiat and bitcoin more convenient. In addition, the tbDEX protocol’s website states that the tbDEX protocol intends to generate ubiquitous and simple on-ramps and off-ramps that enable the individual to gain from cryptocurrency innovation.

The exchange will not be completely anonymous because it will deal in fiat cash, Bitcoin, and other digital currencies. Because of the nature of fiat regulation, tbDEX’s counterparties cannot trade U.S. dollars and other comparable assets anonymously.

tbDEX, on the other hand, enables participants to agree on how much identifying information is needed to complete a transaction. tbDEX counterparties will accept a variety of decentralized IDs and verified credentials, while a centralized exchange may only accept particular IDs.

Although the team recognizes that this strategy may be seen as an effort to diminish anonymity or deanonymize transactions, they hope that it will give resilience to censorship, unpermitted access, and competitive liquidity.

Other Comparative Elements

Square’s strategy differs significantly from that of other decentralized exchanges, which often exclusively deal in cryptocurrencies and keep customers entirely anonymous.

Nonetheless, tbDEX seems to have ambitions in common with other initiatives like Interledger and Stellar’s Anchor project, which have sought to offer decentralized fiat on- and off-ramps.

Another point of reference is Bisq, a decentralized exchange that manages fiat support via a network of escrow providers.

The decentralized exchange was first unveiled in August by Square’s creator and CEO, Jack Dorsey.

Through Square’s Cash App, customers may already purchase, sell, and spend Bitcoin. These transfers, nevertheless, are processed by Square rather than the decentralized exchange it plans to create.


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