Tether CTO discusses threats to USDT; from rising competition to CBDCs
In a recent interview with Paolo Ardoino, the Chief Technology Officer of Tether and Bitfinex, Paolo revealed amongst other plans, that the company is confident that it will maintain its position as the most used stablecoin despite the increasing competition in the stablecoin market.
Adoption of Crypto as a Legal Tender in Lugano
In March, Tether Operations Limited announced a partnership with the administration of the Swiss City of Lugano for the adoption of Tether (USDT), Bitcoin(BTC) and LVGA Tokens (TLVGA) as “de facto legal tender” in the region.
— Paolo Ardoino (@paoloardoino) March 3, 2022
Speaking on the objectives of this partnership, Paolo mentioned that it was aimed at ensuring that citizens of Lugano experience improvements in terms of accessibility to financial services. He added further that the partnership was targeted at ensuring that financial services are offered to citizens with a significant reduction in transaction fees.
On what the citizens of the Swiss City can do with the new forms of legal tender, while noting that integrating the crypto payment services into the existing payment services may take a while, Paolo noted that:
“So the administration of the city is working to allow the citizens to pay taxes and all the city services in the LVGA, Tether and Bitcoin. And of course, all the tourists that come and use the city services can use these three currencies.”
In contradistinction to what is obtainable in El-Salvador where there is a legislation that mandates the acceptance of BTC as a valid means of exchange by merchants, Paolo mentioned that in Lugano, citizens will have the freedom to decide whether or not to accept any of these 3 cryptocurrencies as a means of exchange.
“I believe that it is important to not force these things on merchants. It is important that people have a choice.”
Rise of the Underdog…
When asked to comment on a report from Arcane Research that suggests that the market capitalization for USDC may exceed that of USDT in light of the growth of the stablecoin, Paolo maintained that:
“If you see the volumes of Tether compared to the rest of stablecoins, they are insanely higher. They are even 10 times higher on a bad day.”
Also, while debunking the rumor that the increased public acceptance of USDC over USDT is attributed to the patchy history of controversies with regulators in the United States, Paolo claimed that Tether is transparent with its dealings in line with extant regulations and directives from all regulatory bodies.
Do CBDCs threaten stablecoins?
With increased floatage of CBDCs by Central Banks across the world, it is unclear what the future holds for privately issued stablecoins. Speaking on whether the growth of CBDCs will make stablecoins irrelevant, Paolo noted as follows:
“I believe that they (CBDCs) will coexist with privately issued stablecoins like Tether will coexist with CBDCs.”
Commenting further, he stated that since CBDCs will be built on centralized technology, they do not offer the same accessibility and use cases that stabecoins which are built on public decentralized blockchains offer.