a lot has changed since i hosted Tether CTO Paolo Ardoino on the Invezz podcast last October.
A few weeks after we spoke, FTX Collapsed In a development that few saw coming. In just a few days, $3.5 billion worth of Tether was redeemed as part of a broader decline in the crypto markets. But for Tether, it all went off without a hitch.
This week, Ardoino joins the podcast again to talk about how things have changed, as well as a number of other topics in the ever-dynamic stablecoin space.
We started by talking about Lugano, a small town in Switzerland that is one year into Plan B, an initiative that has seen Tether partner with the city to boost blockchain adoption.
Paolo pointed to the difference between Lugano and El Salvador, where bitcoin has yet to be fully legal tender, as I wrote When I visited last year, there has been some struggle on the education front.
Lugano is a small initiative, Paolo explained, which means it can be developed and scaled up easily. I then asked how easy it was for merchants to adopt bitcoin and tether as means of payment – another area where El Salvador has struggled.
But it branched out into a broader theme about the developing world and bitcoin as well as the strength of the US dollar. As a fellow European, Paolo is well aware of the dominance of the US dollar.
For some developing countries, the dollar represents a rescue route, and the discussion about Tether’s place in providing access to the dollar was fascinating. I’ll let you fill in the dots, but let’s say Argentina, Lebanon, Venezuela, and Turkey were mentioned.
In addition to a broader discussion about bitcoin and the developing world, we also touched on the controversy surrounding Tether’s reserves, a story that has clearly disappointed Paolo.
He talked about how Tether exposed its entire commercial paper portfolio to a staggering $30 billion in nine months. That’s an enormous amount, and we also talked about the billions of ransom requests in the aftermath of crypto scams last year (something that fractional reserve banks will undoubtedly struggle with).
Paolo discussed the community response and the decision to discontinue commercial paper exposure in favor of T-bills. I asked him if this T-Bill allocation (58% as of the most recent count, though this may have changed since then) will drop when rates go back up. Paolo’s answer was telling – they are a “lean team” that showed a $700 million profit in Q4 as the rest of the crypto world was reeling from the FTX meltdown, and so don’t need the stout yields on offer right now.
Paolo also spoke of criticism of him and Tether in comparison to “exciting” or “cooler” CEOs such as the heads of firms such as FTX, Celsius, Voyager Digital. Of course, none of those CEOs are still around — a point Paolo made sure to point out.
We also touched on regulation and the fact that US regulation has gotten tighter lately. I asked Paolo what all this means for Tether, which is headquartered outside the US. His thoughts were interesting, as it recently surpassed 50% market share for the first time since 2021 – especially as a fellow European!
That’s a flavor of what we touched on, but we bounced around a whole bunch of topics. It’s a very interesting time in the stablecoin market and the cryptocurrency industry as a whole, so it was a fun chat.
continue the conversation on twitter with @InvezzPortal, @DanniiAshmore And @tether_to, or travel www.tether.to for more information.
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