U.S. payments giant Square wants to build a decentralized platform called tbDEX for exchanging cryptocurrencies like Bitcoin as well as fiat currency and real-world goods.
Fast facts
- Square released a white paper on Friday detailing how the platform would work. The white paper was released on the GitHub community for contributions. The protocol “facilitates decentralized networks of exchange between assets by providing a framework for establishing social trust, utilizing decentralized identity (DID) and verifiable credentials (VCs) to establish the provenance of identity in the real world,” the white paper notes.
- The main aim of the proposed protocol is to make access to crypto services easy. A developer of TBD, Square’s new department in charge of building decentralized services, wrote in a blog post: “The tbDEX protocol aims to create ubiquitous and accessible on-ramps and off-ramps that allow the average individual to benefit from crypto innovation.” The developer added that the protocol itself will neither collect nor record any personally identifiable information. However, the platform will facilitate the exchange of “minimum necessary identity information acceptable to counterparties in order to satisfy requirements, be they legal, regulatory, or related to any other consideration of risk.”
- The release of the white paper comes after Square and Twitter CEO Jack Dorsey tweeted in August that he plans to build a decentralized Bitcoin exchange. Although Bitcoin and other digital assets are considered to be decentralized currencies, their trade mostly takes place through centralized exchanges like Binance, Coinbase and others where a third-party is entrusted to carry out transactions. However, decentralized exchanges are now growing faster than centralized exchanges, according to a recent report by Chainalysis.