Paolo Ardoino, CEO of Tether, recently highlighted the key role of its stablecoin USDT in increasing demand for the U.S. dollar in emerging markets. He pointed out that USDT not only fuels demand for U.S. public debt, but also provides financial services to more than 300 million users worldwide.

Ardoino’s comments were reportedly in response to an article that stated that dollar-backed stablecoins fueled demand for U.S. public debt.

More than 300 million people use USDT

Paolo Ardoino, CEO of Tether, revealed that more than 300 million people around the world use USDT as a digital dollar to provide basic financial services to communities in developing countries. This stablecoin bypasses the traditional financial system by improving the efficiency of fund transfer and storage, providing convenience for underserved populations that are usually excluded from banking services.

Ardoino stressed that most of these users are unbanked and are affected by high inflation and the rapid depreciation of their national currencies. He wrote: “More than 300 million people around the world use USDT as a digital dollar, providing lifeline utility to entire communities in developing countries.”

This means that if Tether were a country, it would rank ahead of countries like Indonesia, Pakistan, and Nigeria. Therefore, this shows that the high adoption rate of USDT has a significant impact on the global financial system.

Ardoino noted that Tether is one of the top three buyers of short-term U.S. Treasuries globally, and is also among the top 20 buyers overall. This reflects Tether’s growing influence in the financial sector, and the increasing integration of virtual assets with the traditional financial system.

According to Tether's first quarter forensics report, as of March 31, 2024, the company held approximately $90.87 billion in U.S. Treasuries. These holdings include direct and indirect ownership of U.S. Treasuries, and indirect exposure includes overnight reverse repurchase agreements collateralized by U.S. Treasuries. The company also directly invests in U.S. Treasuries through money market funds.

Tether USDT US Treasury Holdings | Source: Tether

USDT market demand and regulatory scrutiny

Tether's USDT is the industry's dominant stablecoin, with a market capitalization of more than $1,112 billion. According to CoinMarketCap, this digital asset controls about 70% of the market share, and its trading volume even exceeds Bitcoin, making it the largest cryptocurrency on the market.

A report by Chainalysis pointed out that the demand for stablecoins such as USDT in emerging markets such as Nigeria, Turkey, Thailand and Brazil is steadily increasing. This shows that USDT is not only popular in mature markets, but also plays an important role in emerging economies.

Despite its dominant position in the market, Tether still faces ongoing regulatory scrutiny. The increasing attention of regulators to stablecoins could have an impact on Tether’s operations and market position.

Meanwhile, Ripple CEO Brad Garlinghouse recently said that the U.S. government may take action against assets such as USDT. This concern reflects the sensitivity within the industry to changes in the regulatory environment.

However, Tether's representative Ardoino refuted Brad Garlinghouse's remarks. This shows that Tether is confident in its compliance and market position and does not believe that regulatory actions will have a substantial impact on it. #Tether #USDT #合规 #监管

Conclusion

As the world's leading stablecoin, Tether's USDT not only plays a vital role in emerging markets to promote global demand for U.S. dollars, but also has an increasingly significant influence in the global financial system. At the same time, Paolo Ardoino’s comments and Tether’s financial report show that USDT has significantly changed the way funds are stored and transferred by providing financial services to more than 300 million users, especially those communities underserved by the traditional banking system.

Ardoino’s firm response shows Tether’s confidence in its compliance and market position as it faces continued scrutiny from regulators and concerns within the industry about its potential impact from government actions.

We believe that as the demand for USDT in emerging markets continues to grow, Tether's USDT is expected to continue to play a key role in the global financial system. At the same time, how it responds to regulatory challenges will also be a key focus of future development.