Tablecoin Paolo Ardoino, the CEO of Tether, stated on Friday that the company’s recent rise is not due to the desire for cryptocurrency trading, but rather to its use as a substitute for the US dollar in emerging economies.

Stablecoins, such as Tether or USDT, are issued by Tether and are commonly used in crypto-to-crypto trade. Their value is intended to remain constant at $1. Tether tokens have been in circulation for more over $100 billion in March, demonstrating the tremendous growth of the last several years.

On the fringes of the Token2049 crypto conference in Dubai, where industry enthusiasts gathered despite heavy rains disrupting life in the desert city, Ardoino said, “In the last few years we have seen the usage of USDT going from pure cryptocurrency trading to being basically the most used digital dollar in the world.”

“Nearly all of our users are in emerging markets,” he stated, citing Brazil, Argentina, Turkey, Vietnam, and “African countries,” all of which have intermittent shortages of dollars.

“Last year for sure Argentina has been booming,” he stated.

Tether, according to Ardoino, has little over 300 million users worldwide.

“We want to be the dollar for the last mile, for the unbanked,” he stated.

The use of cryptocurrency assets has long been associated with market dangers, as regulators have cautioned. In contrast to its “illusory appeal of being a simple and quick solution for financial challenges,” cryptocurrency assets have increased financial risks in emerging economies, according to a research published by the Bank for International Settlements last year.

On Thursday, Sam Bankman-Fried received a 25-year prison sentence.

Locals and foreign traders use the Tether-peso pair on cryptocurrency exchanges as a stand-in for the US dollar-to-peso exchange rate, which means that cryptocurrency exchanges can have an impact on the Argentine currency market.

The collapses in 2022 that caused prices to plummet have largely been recovered from by the cryptocurrency markets. The most valued cryptocurrency in the world, bitcoin, reached an all-time high of $73,803.25, in March due to enthusiasm surrounding inflows into bitcoin exchange-traded funds (ETFs) in the United States, which according to Ardoino had also aided in Tether’s expansion.

As the company expands into new areas like artificial intelligence, like AI, Ardoino, who took over as CEO in December while maintaining the temporary position of chief technology officer, said the company is employing more people and will have about 150 employees, up from about 100 today.

Banks holding stablecoins have been alerted by US regulators about the possibility of sudden withdrawals, such as when holders rush to convert their tokens back into fiat money.

The third-largest cryptocurrency, Tether, claims that it keeps its dollar peg in place by maintaining dollar-based reserves equivalent to the volume of cryptocurrencies it has produced.

(Adapted from NewsWav.com)

Categories: Economy & Finance, Regulations & Legal, Strategy, Uncategorized