The dominant stablecoin Tether has reopened direct redemption of Tether to fiat with a major redesign of its platform, according to its announcement on November 27.

As per the official announcement, the update allows users to redeem their USDT on Tether’s own platform at the ratio of 1:1, without having to rely on a third party. All Tether deposits and withdrawals are free of charge, while fiat transfers are subject to commissions.

Users will be limited to one USD fiat redemption per week, with the new minimal issuance and redemption requirements equal to 100,000 USD and $100,000 USD₮, respectively.

Tether’s new cumulative fee structure for withdrawals and deposits within a 30 day period

As the fee structure above shows, the fee for fiat deposit is 0.1% of the trading value, while the charge for fiat withdrawal increases in size as the amount of the withdrawal increases, from 0.4% to 3% based on different trading value.

At the market level, major crypto exchanges, whale accounts or institutional investors can trade Tether-fiat through the Tether wallet, which will help reduce market dissatisfaction with the Tether premium.

However, the expensive fee has undoubtedly stopped retail investors from cashing in, which sparked somewhat of a fury among users, saying it’s dissuading people from withdrawing.

“So you can’t redeem less than $100k? That means most retail traders are left holding the bag.” “Not one person has come forward with proof they’ve successfully registered with the Tether redemption platform. Tether does not back 1:1, they charge 3% if you can even register to redeem so at best it’s 1.00:0.97.”

In conjunction with the update of Tether, crypto exchange Bitfinex has introduced direct fiat-to-Tether trading by adding Tether Dollars (USDT)/USD and Tether Euros (EURT)/EUR trading pairs, which will replace the previous 1:1 conversion on deposits and withdrawals.

It means that Bitfinex will no longer promise 1:1 USDT/USD conversion, instead, the ratio may vary according to market fluctuation. The decisions of the duo have triggered heated discussion among the community, criticizing they make the rule as they want.

“So if we say someone bought last year with promise that its 1:1 now will have to accept it is not 1:1 anymore” “They are just making the rules as they go, the same thing can be said when they applied their transaction transfer fees increase without alerting their customers.”

The issue also triggered off mixed feelings in Chinese community, among them, Zhao Dong, a top bitcoin influencer, said he thought “it is a big step for Bitfinex to admit ‘stablecoin’ is not ‘stable’ by removing Tether 1:1 conversion. No one can promise the stability of a currency, not even a country, so why we demand an exchange to do so? There’s never true ‘stable coin’ in history, neither fiat U.S. dollar nor gold.”