It's not a decentralised exchange in the accurate sense, but rather a peer-to-peer token swap platform run by Square.
Square's decentralised Bitcoin (BTC) exchange, tbDEX, was released in a white paper released by Jack Dorsey, co-founder and CEO of both Square and Twitter, on Friday. However unlike decentralised exchanges (DEXs), tbDEX will not use a trustless model, and thus will not have its governance token. It is rather a message protocol intended to support trust relationships without depending on a federation to regulate access.
The tbDEX also seeks to incorporate many features that will make it less decentralised than a true DEX. To start, the protocol requires all participants to pass background know-your-customer or KYC, inspections to cooperate with appropriate regulations based on a user's region. Only then can users link their wallets to the exchange and exchange coins.
Moreover, the white paper endorsed the formation of blockchain analytic solutions to monitor transactions on the platform, whether built into the DEX or through a third party. A class of blockchain forensic solutions of this essence could be contentious. Authorities would most likely be able to cross-reference payment IDs and public wallet addresses with KYC information to uncover personal identities behind transacting parties using such a system. Although, supporters assert that such tracking is essential to prevent illegal activities.
However, the centralised features of the tbDEX may gain support from crypto enthusiasts. Chargebacks, which are not available on most DEXs, are one differentiating feature discussed in the white paper. The ability for Square to reverse transactions on the tbDEX, if executed, has the potential to prevent investors from incurring irreversible losses during decentralised finance rug pulls. Square is currently seeking feedback on the white paper through a recently created Twitter account.