Tether CEO admits that the company has made mistakes in the past, but assures that USDT reserves now exceed 104%

Tether CEO Paolo Ardoino spoke to the media about the Brazilian market and the controversy surrounding USDT support.

Brazil’s cryptocurrency market has an undisputed leader: the USDT stablecoin, pegged to the U.S. dollar, which accounts for 80% of the asset class’s buying and selling. This figure comes from the Federal Tax Service, which receives information about cryptocurrency movements in Brazil from brokers, as well as from individuals and legitimate investors. In July, the last month for which data is available, the amount of USDT in circulation in the country was R$15 billion, while the BTC in second place was R$737 million.

Such a large volume of transactions is very important for Tether, the creator and manager of the asset, but the company is unable to specify what percentage of its revenue Brazil has. The information comes from the company’s CEO, Paolo Ardoino, who gave an interview to the media.

“We have a primary market and then a secondary market, which makes it difficult for us to know the geographical origin of each value”, explains the executive.

Ardoino praised the infrastructure of Brazil’s payment system and said it was a market that “everyone must keep an eye on”.

In addition to analyzing the Brazilian market, the CEO of Tether does not shy away from controversial topics: he admits that Tether has made mistakes in the past, but despite this, he has proven the liquidity of his stablecoin in practice. He further noted that no other company in the world does more for BTC than Tether.

Despite the executive’s statement, the company still caused distrust in the market about the way it manages the dollar reserves that support its stablecoin and the people who audit its accounts.

The lack of transparency has even led the U.S. government to file a lawsuit against the company. In 2021, Tether agreed not to do business in New York after a two-year investigation by the New York Attorney General’s Office found that the company had “made false statements about its support for USDT.”

Ardoino says this is a thing of the past, and the company has learned from its mistakes. Even so, he claims that USDT has never lost support. “In May 2022, we were able to redeem $7 billion within 48 hours, equivalent to 10% of our reserves, and over $20 billion in 20 days, equivalent to 25% of our asset reserves,” he said of liquidity.

In Brazil, USDT accounts for 80% of the cryptocurrency market, according to the Federal Tax Service. How do you monitor Tether’s performance in the Brazilian market?

From a technical point of view, Brazil is a market that everyone should keep an eye on. In Argentina, for example, USDT exists like Brazil, but the technical structure still needs to be developed. In Argentina, people use USDT to protect themselves from inflation. In Brazil, this is not necessary, which is why the country can focus more on how to use technology to improve the lives of its citizens.

I know that Brazil is very advanced in terms of payment methods. Everyone pays with Pix in pharmacies, gas stations, and everywhere. And some companies have created a way to integrate USDT and Pix. This shows how companies and governments can develop complementary technologies that make citizens’ lives better and more reliable, while also sending transactions cheaper and more efficiently.

What percentage of Tether’s revenue is Brazil?**

I can’t give you this number because we have a primary market and then a secondary market, which makes it difficult to know the geographical origin of each value.

Are you thinking about creating a true stablecoin?**

We also have other products such as Tether Euro and Tether Mexican Peso. The euro represents a large business sector in the world, but our market capitalization is only 50 million euros, while ours is $88 billion. This shows that the fact is that everyone in the world who does not have a dollar wants it. They don’t want to own the euro. They don’t want to have Mexican pesos. It’s not me saying it, it’s numbers.

How does Tether see the development of CBDC in the world?Do you think USDT will have a competitor?

CBDCs won’t really compete with privately issued stablecoins like USDT. The reason is that USDT is independent and global, while CBDC is only associated with a certain country. If Brazil or another country had a CBDC, people would still be looking for the stability of the dollar. From another point of view, it would be scary for the government to roll out a CBDC.

Currently, whether you use a credit or debit card, the transaction is between you and the bank. If you use a CBDC, the government will look at each individual transaction. They’ll see that every time you buy coffee, the government will know where you bought the coffee, and they’ll also know what’s going on in every person in their country. This is the first time that the government has an accurate picture of each person’s location and habits. It’s horrible. So, I’m sure people will fight. In the free world, people will fight against CBDCs. So I don’t think they’re going to pose a threat to Tether. I believe they pose a threat to people’s freedom in general.

What is your response to Tether’s allegations that its reserves and support are not transparent?**

Tether does more than any other company in the industry to provide transparency. Keep in mind that this is the most scrutinized company in the world. In addition, Tether has provided quarterly data to the New York Attorney General and other regulators, and has cooperated with law enforcement, recently freezing assets on behalf of the authorities.

Now, I’m not saying that in an arrogant way, but Tether is on track to generate $4.5 billion in profits annually and has about $3.2 billion in excess reserves. Any venture capital firm, any Silicon Valley company, as soon as they make a profit, they start extracting profits from the company and distributing them to all the shareholders. All profits will disappear. Tether keeps the vast majority of its profits in-house to further support stablecoins.

Now USDT can be said to be 104% supported. Tether not only invented the stablecoin concept in 2014, but also invented an even more important concept, which is fully collateralized bank reserves. Every bank in the world now has only a fraction of its reserves. Look at Silicon Valley Bank, which pretty much killed our main competitor, Circle. Take a look at the signatures and silver medals. They went bankrupt because they only had 10% liquid reserves. We have 104%.

How to prove the liquidity of USDT?**

In May 2022, we were able to redeem $7 billion, or 10% of our reserves, within 48 hours, and over $20 billion, or 25% of our reserves, within 20 days. All of the banks I mentioned earlier went bankrupt after drawing only 10% of their reserves. So, at the very least, it needs to be said, and the world should see, that we are more resilient and that we are capable of resisting pressures that no bank in the world can resist.

Do you think Tether was treated unfairly in the New York incident?

First of all, we are glad that this problem has been overcome. I don’t think it’s a matter of being treated unfairly. Tether is the company that created the stablecoin industry. And there is no guide on how to do this. We’ve proven that over time, we’ve grown, we’ve started from scratch, and now it’s a company with a market capitalization of $88 billion.

There is no manual on how to build a stablecoin. This is the first time in history. As a company, it’s normal that you could have done better in a more efficient way. This is normal. You’re going to grow, sometimes you’re going to make mistakes, you’re going to correct them, and then you’re going to keep growing. The only thing that matters is that Tether always owns its own successes and mistakes, because we can never grow without acknowledging our mistakes. I’m not sure if this answers your question, but that’s how we see it.

Recently, Tether dropped a legal battle to prevent reporters from Bloomberg and CoinDesk from accessing information about the lawsuit the company was involved in. What is the reason for withdrawing from this dispute?

Tether is a private company, and as a private company, it has made a lot of information public. But we’re still a private company. Ultimately, we decided not to appeal simply because we wanted to show that we had nothing to hide.

It’s still private information for our company, and although we know that Bloomberg may use it in a negative way because they never supported cryptocurrency, remember that in some ways, we’re your mortal enemies, right? But everything was fine. Even knowing this, we decided not to appeal and allowed them to know the information.

In the cryptocurrency market, there are two events that are considered to have the potential to actually end the industry: Binance went bankrupt and took away customer assets such as FTX and USDT, losing parity with the US dollar. Do you feel this responsibility?

We have 300 million USDT users worldwide. Of course, that’s a big responsibility. But we are also humble, simple people, and we are doing everything we can to improve the company and earn people’s trust.

In 2022, all the heroes of the cryptocurrency industry went bankrupt. From FTX, BlockFi, Celsius, Genesis, all of them, Voyager, they all went out of business. For the past nine years, many people have said that Tether will go bankrupt, but this has never happened. Looking around, CEOs who have been praised by traditional media or industry insiders have failed their customers and users. So I’m proud to say that maybe we’re not the prettiest company, maybe we’re not the traditional media’s favorite company, but we’re definitely the most resilient, authentic company to be able to hold on when the bank goes bankrupt. And their competitors have failed for years.

After all, it’s a centralized cryptocurrency, created by a private company with controlled issuance and verification, and an attempt to emulate fiat currencies.

That’s a good question. Let me explain, because that’s very important to me. Tether is the company that helps BTC and contributes the most. Because it’s reinvesting in BTC itself, it’s investing in BTC mining, it’s investing in all BTC companies, which certainly makes sense.

BTC don’t have a marketing budget. All other altcoins have completed ICOs and have marketing budgets. If you look at Tether’s investments, we’ve done a lot more than anyone else in terms of BTC. BTC is the only thing that is decentralized. But 99% of Web3 crypto projects are as centralized as Tether because the supply of each token is heavily concentrated in the hands of a few. So, if you really want to invest in something that will withstand God’s wrath, invest in BTC. If you want, if you want, if you are an ordinary person who needs a dollar, you can use USDT.