Paolo Ardoino: Stablecoins are core financial infrastructure, Tether’s USAT enhances liquidity for US users, and the inevitability of stablecoin adoption

Key Takeaways

• Stablecoins are transitioning from niche crypto experiments to core financial infrastructure.
• Tether is launching USAT, a new stablecoin aimed at enhancing liquidity for US users.
• The future of finance may see tokenized deposits and transactions moving through stablecoins.
• Tether is evolving into a technology company focused on societal empowerment.
• USDT is expected to gain reciprocity as legislation evolves.
• Tether is a pivotal player in the crypto ecosystem, bridging traditional finance and crypto.
• Interoperability between traditional finance and crypto is being enhanced through strategic partnerships.
• Financial institutions are beginning to recognize the necessity of stablecoin solutions.
• Tether’s user base of over 536 million highlights its impact on financial inclusion.
• Tether’s technology development reflects a long-term vision, with recognition coming after years of groundwork.
• Banks have opportunities to innovate by adopting advanced technologies like blockchain.
• The maturity of US Treasuries is vital for stablecoin stability.
• Institutions need experienced professionals to avoid past mistakes in stablecoin development.
• A knowledge gap about stablecoins exists between smaller banks and multinational institutions.
• Stablecoin adoption is inevitable as banks recognize consumer demand for faster, cheaper transactions.

Guest intro

Paolo Ardoino serves as Chief Executive Officer of Tether, the largest stablecoin by market capitalization with USDT in $187 billion circulation globally. He previously served as Chief Technology Officer at Tether starting in 2017, co-leading the strategy that grew its market cap to $83 billion and solidified its position as a global stablecoin leader. Ardoino also continues as Chief Technology Officer of Bitfinex.

The evolution of stablecoins

• Stablecoins are becoming essential to the financial system, moving beyond niche status.
• “Stablecoins are no longer a niche crypto experiment they’re becoming core financial infrastructure today we have 536,000,000 users.” – Paolo Ardoino
• Tether is launching USAT to provide liquidity access for US users.
• “A lot of folks that have really wanted to enter the tether ecosystem from the US have been looking for a vehicle to do that and that’s what USAT provides.” – Paolo Ardoino
• The future of finance will likely involve tokenized deposits and stablecoin transactions.
• “Eventually you’re just gonna see basically stable coin sandwiches built deposits will be tokenized everything will be moving through stables.” – Paolo Ardoino
• Tether’s shift from a stablecoin provider to a technology company reflects its broader vision.
• “It’s not a stablecoin company tether it’s the stable company so a company that build technology to empower society to remain stable.” – Paolo Ardoino
• USDT is anticipated to receive reciprocity as legislation changes.
• “I’m very confident that usdt will receive reciprocity.” – Paolo Ardoino

Tether’s role in the crypto ecosystem

• Tether is positioned as a key player in the crypto ecosystem, bridging traditional finance and crypto.
• “I mean you know tether is the most important player in the ecosystem and what we’re doing is building an on ramp to the us capital markets to that system.” – Paolo Ardoino
• Partnerships and interoperability are facilitating the merger of traditional finance and crypto.
• “We’re working to make usat interoperable with usdt via a variety of mechanisms whether that be through anchorage or issuer or through pools and exchanges.” – Paolo Ardoino
• Institutions are recognizing the need for stablecoin solutions as the financial landscape evolves.
• “As these institutions start to flesh out what this brave new world is gonna look like for them is help them to understand the technology and how it benefits their customers.” – Paolo Ardoino

Financial inclusion and Tether’s impact

• Tether has achieved significant financial inclusion with over 536 million users globally.
• “Today we have 536,000,000 users across the world so that is the biggest financial inclusion success story in the history of humanity.” – Paolo Ardoino
• Tether’s technology was developed over eleven years before gaining widespread recognition.
• “We built the technology and we sit on it for eleven years before seeing the world recognizing it.” – Paolo Ardoino
• Banks have a unique opportunity to adopt advanced technology and innovate their products.
• “I think now the difference is that banks actually can adopt this technology and they can build new amazing products they can have twenty four seven trading they can have in instant settlements at the speed of light.” – Paolo Ardoino

Stablecoin stability and banking opportunities

• The maturity of US Treasuries is crucial for the stability of stablecoins.
• “Having us treasuries is not necessarily the holy grail it’s also the maturity you need to have a short term maturity so that you want your treasury to be resilient to the changes also that could be from like interest rates environment.” – Paolo Ardoino
• New institutions must hire experienced professionals to avoid repeating past mistakes in stablecoin development.
• “I think it will be important for new institution… to hire people that have long term experience in stablecoins to make sure that they don’t redo the mistakes.” – Paolo Ardoino
• There is a significant knowledge gap about stablecoins among smaller banks compared to multinational institutions.
• “If you start going down the the totem pole in terms of just market scale and you’re talking to regionals or super regionals or even communities, I think the knowledge gap begins to widen.” – Paolo Ardoino

The inevitability of stablecoin adoption

• Stablecoin adoption is inevitable as banks recognize consumer demand for faster and cheaper money movement.
• “I think they’ll slowly start to recognize their consumers are gonna have a demand for these products as well everyone wants to be able to move money at will whenever they want at a very cost effective manner and so you know it’s adoption is inevitable.” – Paolo Ardoino
• Stablecoins enable 24/7 trading and settlement, enhancing global trade and banking operations.
• “From an interbank settlement perspective… they can settle over the weekends… it unlocks a lot of wide variety of different manners in which they can engage with the US.” – Paolo Ardoino

Technology and societal impact

• The same underserved populations that struggle with traditional banking also lack access to AI services.
• “The very same people that cannot afford to have a bank account because they cannot pay 150 per year to make keep a bank account open are the same ones as you said that will not have the ability to purchase a subscription for a prominent ai platform.” – Paolo Ardoino
• The disparity in access to AI services could lead to significant societal instability.
• “How society can remain stable if we have the other side of the world so half of the population population of the world they will not become as intelligent so that is a huge risk to the stability of the world and to stability of society.” – Paolo Ardoino

Decentralized energy solutions in Africa

• Decentralized energy solutions are essential for remote villages in Africa due to the lack of centralized infrastructure.
• “We cannot have centralized energy in africa because you cannot in these these villages are very far apart one way the other you cannot have long distance lines and a nuclear plant.” – Paolo Ardoino
• Decentralized energy kiosks are providing essential services to over a million users in Africa.
• “We have 800 kiosks now and 1,000,000 users paying to get these batteries and for them it’s a lifeline.” – Paolo Ardoino
• Technology should be built to be resilient and distributed, focusing on positive societal impact rather than profit.
• “We are not actually optimizing for yet another buck we are optimizing for positive impact on society.” – Paolo Ardoino

The future of stablecoin integration

• The integration of stablecoins into the US financial system will be a blend of retail and traditional finance.
• “I think that Americans will pick up on the idea and concept of stablecoin integration from a retail level… I envision a world in which you’re gonna have access to a stablecoin wallet through your banking UX.” – Paolo Ardoino
• Stablecoins can improve payroll efficiency and remittance processes for low-wage workers.
• “With stables… they can pay it almost on a daily basis and that’s a huge unlock for folks especially for folks that are engaged in remittances.” – Paolo Ardoino

Predictions for stablecoin adoption and technology

• Stablecoin adoption will become extremely widespread in the US, blending crypto with traditional finance.
• “I strongly believe at the end of the day stablecoin adoption will be extremely widespread here domestically and I think that it’ll kind of blend this world of crypto into the traditional financial world in a way that’s you know really positive and leads to tremendous success for both retailers merchants banks and customers alike.” – Paolo Ardoino
• The user experience in crypto needs to improve for broader adoption, focusing on simplicity for consumers.
• “One of the main issues that I still see in the industry is user experience… most of the people in the world they don’t have time to understand crypto… they just want a dollar.” – Paolo Ardoino

User experience and technology design

• User experience in technology should be designed to address real needs and problems of users.
• “The way we build technologies is it needs to be respectful of the actual needs and problems to the people that’s how that are always approached it and and be be helpful and and care about their their struggles and their frictions.” – Paolo Ardoino
• Tether Gold was created at the right moment, leading to its adoption despite initial skepticism.
• “USDT tether gold was born in thousand twenty for the first two three years it was like everyone was telling me oh why why you know we have much better products… so why people should care about gold the gold is not moving.” – Paolo Ardoino

Tether’s strategic investments and market dynamics

• In the event of a black swan occurrence, society will revert to gold before adopting Bitcoin.
• “If a black black swan event happens in the next few years the world will go back to gold not yet to bitcoin.” – Paolo Ardoino
• Bitcoin is superior to gold, but we must acknowledge the current limitations of Bitcoin’s market cap.
• “I believe bitcoin is superior to gold by far but we cannot put our head under the sand we need to look at the type the moment in which we live.” – Paolo Ardoino
• Tether’s investment in gold serves as a hedge against economic instability rather than for speculative purposes.
• “We didn’t invest in gold to speculate on gold we invested in gold as a hedge against the craziness that was happening.” – Paolo Ardoino

Tether’s gold position and compliance standards

• Tether’s gold position is significantly more profitable than many traditional trades.
• “The big short as a trade i think that you know made 1,000,000,000 in profits that short our gold position is probably 10 times that.” – Paolo Ardoino
• USAT is compliant because it is one-to-one backed and offers transparency, making it a trusted digital dollar.
• “The compliance standards are fairly simple right one to one back having the transparency… it’s the first unix compliant product out there it can be used as collateral in trading.” – Paolo Ardoino

The future of product integration and compliance

• The long-term prospects for integration of these products in the marketplace are extremely positive.
• “I think that long term the prospects for just matriculation throughout the marketplace are are extremely positive and we’re gonna drive those things forward.” – Paolo Ardoino
• The writing will be on the wall that these products are here to stay, especially under the new compliance standard.
• “I think that the writing will be on the wall and it’ll be very clear that you know these products are here to stay especially under this new compliance standard.” – Paolo Ardoino

Regulatory clarity and future technological coexistence

• Clear rules for the crypto ecosystem are essential for long-term adoption.
• “Clear rules of the road for the entire ecosystem is very healthy for long term adoption.” – Paolo Ardoino
• In ten years, we will see a coexistence of humans, robots, and AI agents, but stability in society is crucial for this to happen.
• “I think in ten years we are going to see a coexistence of humans robots and a trillion of ai agents… technology is the bond to keep society united stable.” – Paolo Ardoino

Stablecoins as a connecting tissue in future technology

• In ten years, stablecoins will play a crucial role in connecting various technologies and devices.
• “I believe in ten years we’re going to see our products doing exactly that be supporting people in their day to day lives… we’re going to see stablecoins to connect to be the connecting tissue between a robot, a self driving car, a person, a smart fridge, an intelligent light bulb.” – Paolo Ardoino
• Stablecoins can transfer both value and information in a single transaction.
• “The beauty of stablecoins is that we just scratched the surface onto their potential… it can transfer everything; it can create incredible constructs that can be used not only by humans but also by the machines.” – Paolo Ardoino