Tether CTO Interview: The Global Expansion and Regulatory Layout of USDT

Recently, the Bankless podcast conducted an interview with Tether's Chief Technology Officer Paolo Ardoino. In this interview, Paolo elaborated on Tether's global business layout, profitability, attitude towards new regulatory bills, future compliance strategies, and investment directions in fields such as Bitcoin mining, AI, biotechnology, agriculture, and energy.

Strategies for Responding After the Passage of the GENIUS Act

Paolo expressed that they are excited about the passage of the GENIUS Act. This bill establishes a compliance framework for both domestic stablecoins and foreign stablecoins. Tether has been promoting a domestic stablecoin project in the United States, while USDT is also well-positioned to meet the requirements through a "comparable system."

Tether is collaborating with the U.S. Department of Justice to identify and track suspicious on-chain activities using its self-developed monitoring technology. They are working with over 250 law enforcement agencies worldwide, spread across more than 55 countries.

In terms of finance, Tether holds over 125 billion USD in U.S. Treasury bonds. The group's total equity is approximately 176 billion USD, while the market capitalization of the USDT stablecoin is 155 billion USD. They also maintain about 6 billion USD in excess reserves beyond the 100% reserves for USDT.

Global Distribution Strategy

Paolo emphasized that Tether's distribution strategy is "bottom-up". They do not work directly with large banks, but rather educate on the streets, promote in communities, hold lectures, and spread knowledge door-to-door. They seek local partners who align with this philosophy.

Tether has invested in over 100 companies, creating a massive distribution network. They have also invested in cross-border remittance companies, established service points in Central and South America, and built digital currency infrastructure in Africa.

Bitcoin Mining Layout

Paolo revealed that Tether expects to become the world's largest Bitcoin miner by the end of this year. They are working to make their mining deployments more decentralized, currently having mining farms in South America and multiple countries, including the United States.

Gold Stablecoin

The gold stablecoin launched by Tether is backed by physical gold held in vaults controlled by itself. Currently, Tether holds around 80 tons of gold stablecoins and its own gold combined. Users can exchange tokens for real gold bars, but they must own the complete amount of tokens that represent a full gold bar.

Views on the Global Regulatory Landscape

Paolo hopes that the GENIUS Act can serve as a template for global regulation. He believes that the European MiCA regulation has issues, particularly the requirement to hold most assets in uninsured bank deposits. In contrast, the GENIUS Act demands stronger asset security.

He believes that the EU is fearful of US dollar stablecoins and hopes to limit their circulation. Europe is more inclined to launch Central Bank Digital Currencies (CBDC), but Paolo thinks this is not a good direction and may lead to privacy issues.

Tether and its Relationship with the United States

Paolo emphasized that Tether is beneficial to the United States. They are promoting the expansion of dollar hegemony, especially in regions where the U.S. presence is not strong, such as Africa and Latin America. Tether is also one of the largest buyers of U.S. Treasury bonds and debt, helping to decentralize the structure of U.S. debt holders.