Bittrex adds direct USD fiat pairs
What does this mean for cryptocurrency? Possibly more than one might expect.
"It’s been a long path," said Bittrex CEO Bill Shihara. "It’s not just about banks being able to trust Bittrex. It's about banks being able to trust crypto in general. And I think it’s really showing that crypto is turning the corner in terms of mainstream acceptance."
Fiat pairs have been a sticking point for many exchanges, and they're choosing to tackle the issue in different ways, such as by upping and moving to Malta.
The Bittrex fiat pairings might be significant in the broader cryptocurrency space because it didn't involve moving halfway around the world. Instead, the US-based exchange has managed to ink a deal with New York-based Signature Bank.
The larger cryptocurrency exchanges are making ludicrous amounts of money, so any bank that can lock them in as clients stands to pick up some of the reflected wealth. Now that there's a clearer model for US banks to take on cryptocurrency exchanges as clients, there might be a speedier rush into the space, and more fiat pairs on the near horizon.
"They really do look and pore through the entire business," Shihara said. "They want to make sure that we’ve got robust AML/KYC processes, that we’ve got the right controls on our finances. They do background checks and everything. They really look at our business soup to nuts."
The reason fiat pairings are so difficult is because cryptocurrency exchanges pose such a potential risk for banks, who are afraid of inadvertently facilitating money laundering and are wary of hitching themselves to a potentially shady customer.
For reputable exchanges, this fear might be slightly overblown. The larger exchanges sprung up in a very ambiguous regulatory environment, with the expectation that strict AML/KYC laws would be coming for them in the near future. As such, many decided to bake in strict compliance measures right from the beginning. The end result was that many cryptocurrency exchanges went above and beyond to avoid business disruption later, and self-regulated to stricter standards than the law actually requires. They have an inherent advantage though, and as digital currency dealers can follow translations and customers much more easily than banks can.
And right now, institutions and high net worth individuals are looking more closely at digital currencies than ever before. Even as the retail cryptocurrency market chills, big money continues flocking in.
Bittrex is best-known as a security-focused exchange with an extremely wide range of cryptocurrency (200+), so this might represent the first fiat pairing for dozens of different coins.
Whether a customer can actually use it depends on their location though. So far, certain states in the USA are still barred from fiat trading on Bittrex.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, NANO
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