Tether’s USDT Has Uses Beyond Crypto Markets, Trading: CEO Paolo Ardoino

Tether’s
USDT
may
have
started
as
a
cryptocurrency,
but
today
the
largest
stablecoin
by
market
value
is
the
most
used
digital
dollar
in
the
world,
Tether
CEO
Paolo
Ardoino
said
in
an
interview
with
Bullish
CEO
Tom
Farley.

Bullish
is
the
owner
of
CoinDesk
and
a
significant
holder
of
USDT.

Stablecoins,
cryptocurrencies
whose
value
is

pegged
to
a
real-world
asset,
form
the
backbone
of
crypto
trading.
They
provide
a
way
to
store
value
within
the
cryptocurrency
market
without
worrying
about
the
fluctuations
of
cryptocurrencies
like
bitcoin
(BTC).
Most
are
linked
1:1
to
the
U.S.
dollar,
though
some
reflect
other
currencies
and
assets
such
as
gold.

But
there’s
more
to
USDT
than
crypto
markets,
Ardoino
said.
In
countries
like
Argentina
and
Turkey,
the
stablecoin
provides
a
lifeline
as
an
alternative
to
volatile
national
currencies.
Before
the
widespread
adoption
of
USDT,
people
in
inflation-stricken
countries
had
to
resort
to
the
black
market
to
get
dollars.

“USDT
works
much
better
outside
of
the
U.S.,”
he
said.
“In
the
U.S.,
there
are
15
different
transport
layers
for
the
U.S.
dollar.
You
have
banks,
credit
cards,
debit
cards.
You
have
Venmo,
PayPal,
Cash
App,
and
many
others
…
But
who
needs
a
dollar?”

That
might
help
explain
why
USDT
is
not
only
the
largest
stablecoin,
with
a
market
cap
of
almost
$120
billion,
it’s
the
third-largest
cryptocurrency
overall.
Only
bitcoin

(BTC)
and
ether

(ETH)
are
larger.
And
it’s
more
than
three
times
the
size
of
its
nearest
rival,
Circle’s
$35.6
billion
USDC.

More
than
half
of
USDT
–
$61
billion
–
is
issued
on
the
Tron
blockchain,
with
$54.3
billion
on
Ethereum,
the
blockchain
most
widely
associated
with
decentralized
finance
(DeFi).
That’s
because
it’s
significantly
cheaper
to
conduct
transactions
on
Tron,
Ardoino
said.

According
to
Etherscan,
the
transaction
costs
known
as
gas
fees
for
a
simple
swap
on
Ethereum
average
around
$14.60.
On
Tron,

it’s
closer
to
20
cents.

“Imagine
someone
living
in
Haiti
that
earns
$1.34
per
day.
How
can
they
pay
$5
for
transaction
fees?”
he
said.
“These
markets
cannot
afford
to
pay
five,
six
dollars
per
transaction
on
Ethereum
or
some
other
chain.”

Ardoino
also
discussed
another
angle
where
stablecoins
and
geopolitics
intersect:
Treasury
bills.
The
debt
provides
backing
for
the
cryptocurrency,
easily
switchable
into
dollars
if
USDT
holders
want
to
cash
out.
And,
in
the
meantime,
the
interest
payments
roll
into
Tether’s
coffers.

While
China,
the
second-largest
holder
of
U.S.
government
debt,

continues
to
trim
its
holdings
of
U.S.
Treasury
bills,
stablecoin
issuers
like
Tether
have
had
a
voracious
appetite
for
them,
scooping
up
just
over
$100
billion
worth
as
the
People’s
Bank
of
China
dumps
them.

If
Tether
were
a
country,

data
shows,
it
would
have
holdings
equivalent
to
Germany
and
would
be
closing
in
on
South
Korea.

“We
added
resiliency
to
the
ownership
of
the
U.S.
dollar,
so
now
you
don’t
have
one
single
country,
one
single
decision
maker
that
can
sell
hundreds
of
billions
of
T-bills
at
once,”
Ardoino
said.
“USDT
and
Tether
are
the
best
friends
for
the
U.S.
dollar.”

For
most
of
its
history,
the
state
of
Tether’s
reserves
has
been
a
big
question
mark,
and
for
good
reason.

During
its
early
days,
the
company
was
repeatedly
de-banked
and
was
a
bit
of
a
vagabond,
having
to
open
and
close
accounts
around
the
world
from
Qatar
to
China,
Taiwan,
and
Canada.

When
USDT’s
backing
was
unclear,

CoinDesk
fought
to
have
the
full
details
of
Tether’s
banking
relationships
released
by
the
New
York
State
Attorney
General,
which
had
obtained
them
during
an
investigation
(the
stablecoin
is
banned
in
New
York
as

part
of
a
settlement).
Initially,

the
NYAG
opposed
CoinDesk’s
Freedom
of
Information
Law
(FOIL)
request
for
details
about
the
reserves,
but
a
judge
dismissed
their
case.

Now,
things
have
changed
and
the
relationship
is
more
simple:
Most
of
the
money
is
managed
by
financial
services
firm
Cantor
Fitzgerald
with
the
bank’s
CEO,
Howard
Lutnick,

regularly
vouching
for
the
stablecoin
issuer.

Ardoino
said
that
Lutnick
would
have
a
perfect
line
of
sight
into
the
reserves
backing
USDT,
and
Tether
completes
the
same
style
of
attestation
by
a
large
accounting
firm
as
its
competitors.

“Whoever
believes
in
these
conspiracy
theories
should
get
out
from
their
mother’s
basement,”
he
said,
referring
to
speculation
the
company
doesn’t
have
sufficient
backing
for
USDT.