Paolo Ardoino, CEO of stablecoin issuer Tether, was interviewed on December 27 to share Tether’s journey along the way, as well as its goals and challenges in the next ten years. Ardoino also explained in a simple and in-depth way how stablecoins affect the global economy, especially in emerging markets.
The birth and vision of Tether
Tether was born in 2014 with the original intention of combining blockchain technology with the US dollar (USD), the world's largest reserve currency, to create a new digital currency. Ardoino said that Tether is like the blockchain version of PayPal, which can make cross-border circulation of funds fast, convenient and safer through blockchain technology.
Users deposit fiat currency into Tether's bank accounts, and Tether invests these funds in low-risk assets like U.S. Treasuries, issuing a stablecoin USDT equivalent to the U.S. dollar. Users can trade, pay with USDT, and convert it back to fiat currency when needed. Ardoino stated that USDT has become the digital currency choice for approximately 400 million people worldwide.
Tether invests these funds in low-risk assets such as short-term U.S. Treasury bonds and issues an equivalent amount of USDT (stablecoin). Users can trade, pay with USDT, and convert it back to fiat currency when needed. Tether has become the digital currency choice for approximately 400 million people worldwide, with 35 million new digital wallets created each quarter.
2017 was a breakthrough year for Tether, followed by countless attacks.
Ardoino stated that 2017 was a breakthrough year for Tether. With the rise of the ICO boom, many cryptocurrency exchanges began using USDT as a digital dollar, making trading more convenient. Initially, many banks were not friendly towards cryptocurrency exchanges, but there was still strong market demand to price and trade various cryptocurrencies in U.S. dollars. In this context, USDT addressed this issue.
Although Tether has become the market leader, Ardoino noted that many competitors began to emerge after 2017. Additionally, Tether faced scrutiny and attacks from the New York Attorney General and market speculators between 2019 and 2021. However, Ardoino stated that Tether has proven the robustness of its asset reserves and successfully handled several market stress tests.
USDT is a lifeline for high-inflation countries and the first choice in emerging markets.
Ardoino emphasized that while the United States and Europe have stable financial systems and therefore have low demand for USDT and other digital dollars, for countries with high inflation and unstable financial systems like Turkey and Argentina—especially under circumstances where local currencies depreciate by as much as 80%-98%—USDT is like a lifeline, providing financial stability for the younger generation and many families in these countries.
Ardoino added that approximately 3 billion people globally are unable to access traditional financial services due to low income, high fees, and other reasons, thus being excluded from the banking system. As a result, USDT provides a way to access savings without the need for traditional financial systems, particularly suitable for emerging markets in Africa, South America, and Asia.
The future of disintermediation: Tether's new goal.
Ardoino stated that Tether is actively investing in Bitcoin mining and AI, believing that securing the Bitcoin network relies on mining decentralization, which can effectively reduce risks. Regarding AI, Ardoino believes that the current development model is too centralized, with most data and computing power monopolized by a few tech giants; thus, AI must move towards a more privacy-protecting and decentralized development model in the future.
Ardoino stated that Tether currently holds 82,000 bitcoins and 44 tons of gold, and has developed a peer-to-peer communication protocol called Whole Punch, aimed at creating serverless instant messaging and live streaming technology. He further added that Tether not only holds traditional and crypto assets as financial backing but also continues to innovate on a technical level. 'In the future, we will be more committed to promoting decentralization and technological innovation to provide more diverse and secure financial services for global users,' Ardoino confidently stated.
(Tether: USDT injects new life into high-inflation countries and is the best partner for the U.S. dollar)
This article discusses how the stablecoin USDT works. Tether CEO Ardoino shares how digital dollars are changing the global financial game, originally published in Chain News ABMedia.