Tether: USDT Injects New Life into High Inflation Countries, the Best Partner for the US Dollar

The CEO of stablecoin issuer Tether, Paolo Ardoino, recently spoke to CoinDesk stating that USDT has found its place in the global financial system, especially in countries with high inflation and unstable financial infrastructure like Argentina and Turkey, where USDT plays a crucial role. In the past, people in these countries had to resort to black market trading to acquire US dollars, but now, with USDT, this situation has improved. Tether is also known for holding a significant amount of U.S. bonds in its reserves, leading Ardoino to refer to himself as the best partner of the U.S. dollar.

US Payment System Well-Established, but USDT Holds Advantage in Global Cross-Border Payments

Ardoino pointed out that the United States has various payment methods and platforms such as banks, credit cards, debit cards, Venmo, Paypal, Cash App, etc., making the circulation of the US dollar very convenient to meet the daily payment needs of American citizens, reducing the necessity of using USDT. However, these payment methods mentioned above may not be as widely used outside the United States, making USDT more useful, especially for facilitating cross-border payments and circumventing local financial restrictions.

This may explain why USDT is not only the largest stablecoin with a market capitalization close to $120 billion, but also the third-largest cryptocurrency after Bitcoin and Ethereum, far surpassing the market capitalization of USDC issued by Circle by more than three times.

In addition, a previous study by VISA also indicated that habit might be a major factor in the popularity of USDT. VISA interviewed local residents in developing countries, asking if they would switch from USDT to other stablecoins. Most respondents stated that they continued to use USDT due to "habit." The popularity of USDT is mainly attributed to its high stability and wide usability, factors that also contribute to the increased trust of users in USDT.

Low-Income Countries Prioritize Tron, Tether Emerges as the Best Partner for the US Dollar

Ardoino stated, "Imagine users in low-income countries like Haiti earning less than $1.4 a day. If you ask them to pay a transaction fee of $5 to $6 on Ethereum or other chains, how is that possible? But Tron only requires a fee of 20 cents, so they will naturally choose Tron." He added that over half of USDT is issued on the Tron blockchain because of lower transaction costs, better meeting the needs of users in low-income countries.

Tether has also garnered attention for holding a large amount of US Treasury bonds. Regarding this, Ardoino humorously remarked, "We have made holding US dollars more flexible, so now there won't be a single country or decision-maker selling off hundreds of billions of US Treasury bonds at once. USDT and Tether can be considered the best partners for the US dollar."

Concerns and Questions Surrounding Tether's Reserves and Audits

Questions about Tether's reserves have always been a subject of scrutiny. In the early days of its establishment, Tether faced difficulties in collaborating with banks and had to open and close accounts repeatedly in various countries globally, including Qatar, China, Taiwan, and Canada. The adequacy of reserves has become a focal point, prompting Tether to regularly publish asset audit reports to demonstrate that they indeed have sufficient reserves to back all issued USDT, thus enhancing market trust in them.

Self-Proclaimed Regular Audits and Adequate Reserves, Pushing Back Against Skeptics

However, Ardoino claimed that Tether's reserve management has become simpler, with the majority of funds managed by financial services company Cantor Fitzgerald, and its CEO Howard Lutnick ensuring that Tether's reserves are sufficient to support USDT. Ardoino also mentioned that, like Tether's competitors, large accounting firms conduct regular asset audits to ensure reserve transparency. He responded to external skepticism by saying, "Those who believe in conspiracy theories should grow up."

American consumer protection groups warn about Tether: audits have not been conducted, fearing it may become the next FTX.