原文标题：Tether’s Billionaire CEO Is Afraid Of Wasting This ‘Once-In-One-Hundred-Years Opportunity’
Original author: Steven Ehrlich
Original source: forbes.com
Compiled by: Mars Finance, Daisy
Paolo Ardoino said the company has made more money than he ever imagined, and now he plans to use the company’s balance sheet to replicate its success with digital currencies in the data, artificial intelligence and education sectors.
Tether CEO Paolo Ardoino is investing his company’s multibillion-dollar balance sheet in future technologies. Wolfgang Wilde for Forbes
Paolo Ardoino is the CEO of Tether, the $114 billion stablecoin issuer. In this interview, we discuss how he has evolved Tether’s strategy since becoming CEO, how the company is adapting to new competitors like State Street and increasing regulation, whether they will issue a yield-bearing token, and how the presidential election will impact Tether and stablecoins more broadly.
Forbes: You’ve been CEO since December. How has Tether’s strategy changed since then?
Paolo Ardoino: Since I became CEO, we have transformed Tether from a stablecoin company to a stablecoin company. To say we are “just a stablecoin” understates our impact, as USDT is the largest stablecoin on the market by trading volume, surpassing Bitcoin, Ethereum, and many other tokens combined. Its user base is growing every day, with over 350 million users worldwide. For many companies, this is enough. Still, one of the things that we realized as a company, and I realized because of my technical background, is that what we're doing with stablecoins is called disintermediation. We can build things to disintermediate or eliminate unnecessary intermediaries. There are players and stakeholders in any process, but unfortunately in finance there are too many. It’s about efficiency, we create a better, more efficient digital dollar. I don’t even consider USDT a cryptocurrency anymore. I think of it as a digital dollar, at least a digital dollar for 350 million people around the world. It's not chump change; that's almost 5% of the world's population. We also realize that intermediaries are a scourge that is infiltrating many other industries.
We thought about the telecommunications industry and invested in Holepunch as a peer-to-peer communication protocol. Education is another area. Education is becoming more and more political, but it should be objective and more direct. In terms of students, I'm not sure about the US, but in Europe, during the COVID-19 pandemic, no one had the tools to educate children. They had to build these tools in a hurry. But now that the pandemic is over, these tools will disappear. They spent billions of dollars, and now these billions of dollars have been wasted, and we will go back to the old teaching model.
Artificial intelligence is another big area of investment. The problem with AI is intermediation in the form of controlling AI, which makes it very political, or a way to collect a lot of information from people who upload a lot more information on ChatGBT than they do on Facebook. Tether is working on local AI. This is a way to eliminate intermediaries, and this technology will be more disruptive to humanity than anything in the past 5,000 years.
Forbes: In the spring interview, you also mentioned how you were preparing for the end of the world. I think that fits in with your theme of disintermediation. Can you elaborate on that?
Ardoino: We seek three things. One is disintermediation, two is resilience, and three is independence. If you have those three things, we can build a doomsday society. Why are they important? You want to make sure that if you are in a local community—nobody is advocating anarchy—you also need to make sure that your survival is not dependent on decisions made 7,000 kilometers away from you. The problem is that most of our daily lives are covered by technology. If you are a small country, you cannot control technology, you cannot control the communication system, you cannot control energy production, you cannot control money.
Let's think about El Salvador and countries like that. They have currencies that are adopted or that are not controlled by them. For example, they use the U.S. dollar or technology that was developed by other people, Google, WhatsApp, Zoom, etc. So all the technology that is used globally is controlled by these companies. The beauty of the internet is building resilient technology that facilitates the spread of information. The internet was built to survive the apocalypse because if there's an asteroid anywhere in the world, which hopefully won't happen, the network is a network and it can heal itself. But even though we built this incredible thing, the internet, we concentrated 70% of the information in three companies: Amazon, Google, and Microsoft. We built systems that are resilient to that. When it comes to money, we have Bitcoin and, in a sense, USDT. When it comes to communications, we're building solutions for that. When it comes to AI, we have local AI. In education, we have technology platforms based on the peer-to-peer communication systems that we're building, and so on.
Forbes: Do you consider it a privilege to be able to take this approach given that Tether has been so profitable and that, at least for now, you don’t need to accept LPs to make these investments?
Ardoino: USDT is making a ton of money. We’ve made $11 billion in the last two years, and most of it, over 90%, has stayed in the company. Why? Because if we gave that money away, we wouldn’t be able to do anything. Instead, having this significant buffer outside of the reserve allows us to not worry about what will be profitable tomorrow. If we succeed, people can build services and businesses around this technology and make a ton of money. We are Bitcoiners. We come from this ethos, this philosophy. This is how I describe it to the people we work with, because I believe—and I’m probably on opiates here—that Tether is a once-in-a-century company. Tether is lean; it’s a private company, so it has the flexibility to make decisions about what to do with the profits. If you were a public company, you’d have hundreds of shareholders knocking on your door because they want dividends, and everyone has an idea. We have an idea of what types of things humanity needs. Imagine a company that’s so profitable that the shareholders agree to keep almost everything—all the profits inside the company—and use those profits to build something that we think will make humanity better, more resilient, more independent, and ready for the end of the world. Imagine wasting such a big opportunity. We are simple people; we don't need a lot of things, but we want to use this opportunity in the best way possible to build something that we think is meaningful.
Forbes: Coinbase has made some great progress by taking Base and building this whole ecosystem. Is there any chance that Tether could build some L2 or blockchain platform?
Ardoino: Tether will announce new financial products soon, like blockchain-based products. I've publicly said that our new digital asset tokenization platform will be launched by the end of this year. That's an example of a new product. It will use all the technology that Tether has built over the past 10 years, which has now secured over $113.6 billion, and make it available to everyone in a non-custodial way. But Tether shouldn't launch a chain. Blockchains are largely casinos, and there's not a lot of glory. Some chains are very interesting. For example, the Telegram blockchain has an ecosystem of a billion people who can transact and send payments. That's a clear value proposition for every product. You need to have a clear value proposition, but many chains don't. They're very centralized and a way to issue another token. With our resources, I hope that at least we can come up with something better and more interesting for the world.
Forbes: Regarding blockchain, you recently announced that you will stop minting on Algorand. Are there other blockchains that you have similar concerns about? Or are there other blockchains that you are excited about or considering minting Tether?
Ardoino: We announced that we will stop supporting Algorand EOS, Bitcoin Cash, Kusama, and Omni in the next six months, which is our first service. This is not for security reasons. It is more for usage reasons. When you support a chain, there is an ecosystem, not only internally but also externally. It takes time, security teams, and a lot of energy to monitor this chain. We want to make sure that if everyone is putting effort into a specific chain, it is because there is enough interest and usage of USDT. Otherwise, it would be a waste of resources and we want to keep the company lean. We want to remain flexible and continue to build awesome things like we are now. So we sometimes need to make decisions on our own and cut off branches that don't work well.
Forbes: Forbes published an article called "The Rise of Crypto's Billion Dollar Zombies" in which we pointed out that 20 L1s with at least $1 billion in circulating market capitalization are essentially functional zombies. We mentioned three of these chains: EOS, Bitcoin Cash, and Algorand. I always thought of Kusama as a bit of a testnet, and Omni was just launched.
Ardoino: Tether is listed on Omni, so this is not an easy decision. The worst thing about having a process is not following it. Tether has internal processes, and Tether is under heavy scrutiny in many areas, including managing reserves. So if we decide to list a chain’s standards, even if it’s our initial chain, we have to do that.
Forbes: How much money have you invested so far?
Ardoino: About $3 billion.
Forbes: I asked you this question before. Is there any progress in the audit?
Ardoino: My answer is the same every time. Let's put it this way: You know, I've complained in the past about Sen. Elizabeth Warren [D-MA] warning audit firms not to take on more crypto companies, and that didn't help. A large audit firm might serve 50,000 banks, and each bank might pay them $1 million a year. Imagine you have those 50,000 banks, and then you also have a stablecoin company. What would your 50,000 clients think if you joined a stablecoin that is probably its strongest competitor? So it's not an easy selling point for the Big Four accounting firms (Deloitte, PwC, KPMG, and EY). But I also think that given Warren's question, this issue might resolve itself if the new administration is more supportive of crypto.
Forbes: Beyond audits, are there any procedures or trust-building measures you can share so that USDT holders know there is a strong firewall between profits and collateral funds? I know you're sitting on billions of dollars in profits, but you've also written nine-figure checks for some of these investments. Playing with AI isn't cheap.
Ardoino: We have Tether International Limited (TIL), which manages the stablecoin. It has reserves and excess reserves (we keep about $5 billion in excess reserves). They are separate; they have separate bank accounts. Investments are made through Tether Investments, which is a separate company. Investments in AI are not part of the reserves.
Forbes: You are the CEO of Tether and you are also the CTO of Bitfinex, a major exchange. Have you ever considered whether holding both positions is sustainable? Will you one day focus on Tether because you are pursuing some big idea?
Ardoino: I'm also the CSO of Holepunch. What I do is lead. I'm involved in building Bitfinex. We have talented developers. We have people who can steer the ship in a very tight, secure way. I love mentoring and caring for the people who built and helped grow Bitfinex and Tether. I'm constantly interacting with different stakeholders to strategize or give advice on how I think things should be done. I have a clear vision for how things should be done. I'm also very picky about details. If I ever felt like I was getting sloppy in any one role, it would definitely be time to delegate more. But for now, everything is going pretty well and I have the time to focus on all the things I want to do and probably a few more.
Forbes: There’s been a lot of press about your $400 million investment in AI provider and Bitcoin miner Northern Data, including a rumored IPO and a lawsuit from several employees claiming tax fraud. What’s your reaction?
Ardoino: We haven’t decided yet [on the IPO]. There are always rumors [about the lawsuit].
Forbes: Given Trump’s strong electoral prospects (Editor’s note – this interview was conducted before President Biden dropped out of the 2024 race), how will the Trump administration affect Tether?
Ardoino: It's hard to predict what's going to happen. I can't call myself an expert on American politics. I'm hearing and seeing more progress toward reducing the pressure on cryptocurrencies, especially from the SEC. I grew up in the 1980s and 1990s and saw the United States as a place of innovation and a country that was going to save the world. Take the movie Armageddon, for example, and that's the role that the United States has always played in everyone's mind around the world. And then you see the behavior in cryptocurrencies, and for someone who lives abroad and is not American, it feels very counterintuitive. Why is this happening? Why doesn't the United States see how great these things are, and why don't they take the lead? The United States has a great opportunity to regain the lead and provide clarity to the rest of the world. Everyone is waiting, and I think the approach that the United States takes over the next 16 months will be critical. The United States will have an opportunity to show that they believe that cryptocurrencies are here to stay and, of course, need to be regulated in a reasonable way.
Forbes: What do you think of Trump's understanding of cryptocurrency? Ethereum founder Vitalik Buterin published an article criticizing industry insiders for supporting Trump just because he now says good things about cryptocurrency. Trump said he wants all Bitcoin to be mined in the United States in the future. You fund Bitcoin mining elsewhere, and centralizing all mining activities in one country may run counter to your philosophy of decentralization. What do you think?
Ardoino: One of the reasons Tether invested in Bitcoin mining is that the US government has a mixed attitude towards Bitcoin mining. Of course, we always support countries supporting Bitcoin mining. If Trump wanted to mine all Bitcoin in the United States, he would promise to provide energy supply for Bitcoin miners. Of course, it is impossible to mine all Bitcoin in the United States, but it means that they will at least participate in the competition, which is the crucial part.
Speaking of Vitalik, people vote for what they believe in. You vote for the candidate who best represents your vision for society. Vitalik's description is more like people want someone to cheer them on. That's not the case. I think people want to feel at home, and you feel more at home when the candidate supports something you truly believe in.
Forbes: Stablecoins with yields are starting to be launched. There have been comments that Tether does not share the yield with token holders. What do you think about this?
Ardoino: We don’t share the gains for two reasons. One, it would make the product a security. Two, the gains are very small compared to rampant inflation. Take Argentina, for example, where the currency has depreciated 98% against the dollar over the past five years, and the Argentine peso has a weekly volatility of 4%. Imagine giving someone a 4% return per year when their local currency has an intraday volatility of more than 4%. Of course, everyone wants more money if they can. But that’s why USDT doesn’t make sense for the average American. In the U.S., you can hold and send money with Venmo, PayPal, and 15 other ways. People around the world can’t do that. So these people don’t need the gains on top of premium services either. They’re already making 600% on USDT, so they don’t need to make another 4%. With that 4% gain, we can reinvest in building great technology to promote financial inclusion. Tether has almost single-handedly helped solve the problem of financial inclusion.
Forbes: There were reports this week that State Street Bank wants to launch a stablecoin, and I imagine there will be more news to follow soon.
Ardoino: I welcome other stablecoins. Given the money we make, of course, there will always be competition. I would like to see more competition in emerging markets, but the reason we’ve been successful in those countries in the first place is because the banking system has held those countries captive; those countries are not very profitable for them. Tether has been successful because we act as their checking and sales account. So if State Street or anyone else wants to come into those countries and compete with us, we’d love it because, at the end of the day, we’re making more money than we ever believed, imagined, and dreamed of for hundreds of years. So if someone could come in and get another 300 million users and help those countries, that would be great. I mean, we’re still human beings and believe in human progress.
Forbes: You manage one of the largest Treasury portfolios in the world. There is a lot of talk about a steepening yield curve, a widening spread between long and short Treasury bonds, and a possible resurgence in inflation. In September, the FOMC is expected to cut rates for the first time, and U.S. debt is expected to rise regardless of who is president in January. How do you think about this as you continue to manage your Treasury portfolio?
Ardoino: Short-term Treasuries and overnight reverse repo are the answer. With overnight reverse repo, we can get all the liquidity we need in the event of large redemptions, like $10 billion or $20 billion a day. That's how you get liquidity. And then short-term (like 90-day maturity) Treasuries are well positioned for potential rate cuts. There may be some rate cuts for political reasons, but we don't see huge changes. We don't see rates going to zero or close to zero again. Imagine a company with a market cap of $113 billion; even if their interest rates stay around 2% or 3%, it's enough to continue to build - even 1% is more than enough.
Forbes: There are a lot of questions about how USDT will align with Europe’s new cryptocurrency legislation, MICA. What is your strategy to ensure that no European exchange will delist it?
Ardoino: You may remember that I have publicly expressed concerns about MICA and the 60% uninsured cash deposit requirement, just like what happened to Circle with Silicon Valley Bank in 2023. They lost $3 billion, but they survived because the FDIC stepped in. My problem is, USDT to me is a tool to help 300 million people, and I know I sound like a broken record. So I don't want to jeopardize those 300 million people who hold USDT by having to put 60% of their uninsured cash deposits in a European bank. There are better ways than this. A lot of people have reached out to me privately to thank me for saying this.
MICA also limits the amount that can be traded or earned. I was asked if I was worried about this. I am not. It is a restriction for protection or to create a sandbox, which is good. Such restrictions can increase or decrease risk. On the contrary, the 60% cash deposit requirement increases risk.
I read that after Circle said we got the license, they also said, “Oh, by the way, this is risky.” So it’s all fun and games until somebody loses an eye. I think companies like Tether have to continue to communicate with regulators that these are significant risks, that stablecoins and European stablecoins will keep so much money in European banks that it will become a systemic risk and increase the likelihood of European banks going bankrupt. Imagine this scenario: you have $10 billion. Your stablecoin has a market cap; $6 billion has to be kept in cash deposits, or €6 billion has to be kept in cash deposits. The bank can lend out 90% of that. That means €5.4 billion can be lent out. So the bank has a cap of €600 million on its balance sheet. Then someone comes to you and asks to redeem $2 billion. Tether sells it in 2022 — that kind of pressure. So, €2 billion, redeemed, the bank is left with €600 million. What happens? The bank goes bankrupt. Everyone will blame stablecoins, but more importantly, you can then demonstrate, and it’s easy to understand, that this MICA requirement would create systemic risks for European banks.
Forbes: Thank you.
Ar said the company has made more money than he ever imagined, and now he plans to use the company's balance sheet to repeat its success with digital currencies in the fields of data, artificial intelligence and education.