“Tether’s USDT Has Uses Beyond Crypto Markets”

Tether CEO Paolo Ardoino reported in an interview with Bullish CEO Tom Farley that although Tether’s USDT started as a cryptocurrency, today the largest stablecoin by market cap is the world’s most used digital dollar.

Stablecoins, cryptocurrencies whose value is pegged to a real-world asset, form the backbone of crypto trading. They enable value to be stored in the cryptocurrency market without worrying about the fluctuations of cryptocurrencies such as Bitcoin (BTC).

But Ardoino says USDT is more than crypto markets. Stablecoins are becoming an important alternative to volatile national currencies in countries such as Argentina and Türkiye. We can say that before the widespread adoption of USDT, people in countries affected by inflation had to resort to the black market to buy dollars.

“USDT works much more outside the USA,” says Ardoino, and continues: “In the USA, you can find 15 different options for carrying US dollars. Banks, credit cards, debit cards, Venmo, PayPal, Cash App and many more. “You have… But that’s not the case everywhere.”

This explains why USDT is not only the largest stablecoin with a market cap of approximately $120 billion, but also the third largest cryptocurrency. Located just behind Bitcoin (BTC) and ether (ETH), USDT triples the $35.6 billion USDC of its closest rival, Circle.

More than half of USDT ($61 billion) is on the Tron blockchain, while $54.3 billion is on Ethereum, the blockchain most associated with decentralized finance (DeFi). Ardoino explains this because it is significantly cheaper to trade on Tron.

According to Etherscan data, the transaction cost of even a simple swap on Ethereum is around $14.60 on average, while on Tron this fee is close to 20 cents.

“Imagine someone living in Haiti making $1.34 a day. How would he pay $5 in transaction fees?” he said. “These markets cannot afford to pay five, six dollars per transaction on Ethereum or any other chain.”

Ardoino discussed another element where stablecoins and geopolitics intersect: Treasury bonds.

As China, the second-largest holder of US government debt, continues to reduce its holdings of US Treasury bonds, stablecoin issuers such as Tether have purchased them and the bonds have gained over $100 billion in value.

Data shows that if Tether were a country, it would have assets equivalent to Germany and even come close to South Korea.

“We provide flexibility to the ownership of the US dollar. You no longer have a single country, a single decision maker who can sell hundreds of billions of T-bills at the same time,” Ardoino said. “USDT and Tether are one of the best things to happen to the US dollar.”