Square through its TBD project wants to build a native Bitcoin DEX. The latter would make it possible to do without centralized exchanges to exchange fiat for Bitcoin.
A Bitcoin DEX in Square’s labs
Square and Twitter founder Jack Dorsey revealed in an August 27, 2021 tweet TBD’s plans to build a decentralized exchange on Bitcoin.
TBD is a new project from Square with a focus on Bitcoin and centered on “building an open platform for developers with the sole purpose of facilitating the creation of non-custodial, unlicensed, decentralized financial services.”
According to Mike Broke, director of TBD and executive of Cash App – Square’s mobile app, the new DEX would be “Bitcoin native, top to bottom. It will be 100 percent open-source and without permission or “a foundation or governance model that TBD controls.”
Broke defends Bitcoin as the future currency of the internet, a vision that would justify the network’s choice to build this DEX over alternatives like Ethereum (ETH):
“We believe that Bitcoin will be the native currency of the Internet. While there are many projects to make the Internet more decentralized, we are focused solely on a robust global monetary system for all.”
A fiat DEX with KYC/AML compliance
Broke emphasized that this DEX would be in a decentralized fiat exchange with the goal of:
“facilitate the funding of non-depository wallets anywhere in the world through a platform to build on-ramps and off-ramps to Bitcoin.”
This will eliminate the need for people wishing to buy or sell Bitcoins to “exchange fiat with a centralized, depository service like @CashApp or @Coinbase.”
And while this is a DEX, Broke clarified that “entities that trade fiat for cryptocurrencies will need to comply with KYC/AML laws.”
Jack Dorsey continues to support Bitcoin via this new DEX in the making. Dorsey previously announced Square’s plans to develop a hardware BTC wallet. The TBD should theoretically release other Bitcoin-based financial services, allowing Bitcoin to compete with Ethereum in the DeFi space.