The Stablecoin King | Tether CEO Paolo Ardoino on GENIUS Act, Circle IPO, Bitcoin & Tether to Trillions

Tether CEO Paolo Ardoino returns to Bankless at a historic moment for stablecoins. With the Genius Act advancing in the U. S. Congress, Paolo discusses what regulatory clarity means for Tether, the future of USDT, and the company’s plans to launch a domestic stablecoin. We explore the Circle IPO hype, Tether’s eye-popping profits, its growing presence in the U. S. Treasuries and Bitcoin mining, and how grassroots distribution across emerging markets powers its dominance. Paolo also gives a glimpse into Tether’s ambitions in AI, tokenized gold, and the battle to distribute the dollar where banks can’t reach. ------ 🎬 DEBRIEF | Ryan & David Unpacking the Episode https://www.bankless.com/podcast/debrief-the-stablecoin-king-tether-ceo-paolo-ardoino ------ BANKLESS SPONSOR TOOLS: 🪙FRAX | SELF SUFFICIENT DeFi https://bankless.cc/Frax 🦄UNISWAP | SWAP ON UNICHAIN https://bankless.cc/unichain 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle 🌐CELO | BUILD TOGETHER AND PROSPER https://bankless.cc/Celo 🟠 BINANCE | THE WORLDS #1 CRYPTO EXCHANGE https://bankless.cc/binance ------ TIMESTAMPS 0:00 Intro 5:32 GENIUS Act 12:54 Tether & The US 22:13 Domestic Competition 26:23 Circle IPO 23:36 Handling Pressure 28:32 Stablecoin Valuations 31:38 Winning the Next Chapter 36:52 USDT in Emerging Markets 41:58 Tether & Crypto Correlation 45:52 Tether Ventures 53:25 Tether Wallet? 56:44 Tether & Bitcoin 1:00:15 Other Assets 1:01:07 Bitcoin Mining 1:04:58 Tokenized Gold 1:09:01 GENIUS Act Consequences 1:12:27 Europe 1:14:49 Why Tether is Good 1:17:50 Closing & Disclaimers ------ RESOURCES Paolo Ardoino https://x.com/paoloardoino USDT Insights https://usdt.network/ Tether https://tether.io/ ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Last year, we made 13.7 billion in profits. And this year, I think we are going to beat that.

• 0:05Ryan Sean Adams?

  Wait, 13.7 billion in profits?

• 0:08Speaker 00

  Last year. And this year, I think we can do a little bit better.

• 0:15Ryan Sean Adams?

  Welcome to Bankless, where we explore the frontier of stablecoin finance. This is Ryan Sean Adams. I'm here with David Hoffman, and we're here to help you become more bankless. Guys, there's a Game of Thrones going on right now, a stablecoin war of sorts. Tether is the undisputed number one lead of stablecoins right now. So I guess that makes our next guest, Paolo Ardoino, who's its CEO, the stablecoin king. And I gotta say, for a king, he's pretty unassuming, but he has ambitious plans for the continued distribution and dominance of Tether. And that's going to be important in this new era, an era where we've just seen the Genius Act, the US's landmark stablecoin bill, just passed the Senate.

• 0:58Ryan Sean Adams?

  Looks like that's going to go forward to Trump's desk, and it will get signed. So my biggest question going into this episode was, assuming the Genius Act passes, what's Paolo planning to do with USDT and Tether? Is he going for compliance? Or is he going to launch a new US domestic stablecoin and bifurcate things? The answer sounded like it was both, but it was also really nuanced, and you'll have to listen in to find out and get your take. He also said, and this made David and I almost fall out of our chairs, that Tether made almost 14 billion in profits last year. Okay, that's profits. I did some math after this episode was recorded, and if you take the price to earnings ratio

• 1:40Ryan Sean Adams?

  of Circle right now, which is trading at pretty heady valuations, and you multiply that by the earnings of Tether, around 14 billion, you turn Tether into a 13.7 trillion dollar company. That'd be the largest company right now that exists, ahead of Microsoft, Apple, Nvidia, and all of the rest. I'm not sure if Tether is worth that much, but it's certainly gargantuan in scale. He also broke the news that Tether is launching a new product this year. So let's get right into the episode with Paolo, but before we do, I want to thank The sponsors that made this episode possible.

• 2:12David Hoffman?

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• 2:57David Hoffman?

  stake it, and help shape Frax Nation's future. Ready to join the forefront of DeFi? Visit frax.com now to start earning with Frax USD and staked Frax USD. And for Bankless listeners, you can use frax.com/r/bankless when bridging to Frax still for exclusive Frax still perks and boosted rewards. Uniswap is your gateway to a more efficient DeFi experience. With Uniswap swapping and bridging across 13 chains, it's simple, fast, and cost-effective, helping you move value wherever, whenever. Thanks to deep liquidity on the Uniswap protocol, you'll enjoy a minimal price impact on every trade. And now, Uniswap V4 takes it even further. Swappers benefit from gas savings on multi-hop swaps and ETH trading pairs, while liquidity providers can create new pools at 99% lower costs. The best part: you don't have to do anything extra.

• 3:41David Hoffman?

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• 4:22David Hoffman?

  In just five years, Cello has processed 730 million transactions for 12 million addresses. It's launching with 100 partners and fresh DeFi firepower. That makes Cello the on-chain FX hub for borderless remittances and real-world spend. For builders, distribution is baked in. Programs like Presentee Grants, Retroactive Public Goods Funding, CelloCamp, and Proof of Ship will put your mini-app on Farcaster and Opera Minipay. Tokenomics leveled up too. The great Cello halving cuts inflation from 2% to 1%, aligning the chain with its ambitious Vision 2030. A trillion-dollar on-chain economy where regens, cypherpunks, and degens create prosperity for all. Follow at Cello on X and start building at cello.org today. Bankless Nation, we are once again joined by Paolo Ardoino. He's at the helm of Tether, the $150 billion stablecoin,

• 5:06David Hoffman?

  the thing that really brought stablecoins into existence in the first place. Last time we talked, this was pre-stablecoin bills, pre-Genius Act, all of this stuff that's going on inside of Capitol Hill. So there's a bunch to get updated on. Now with the US on the brink of passing just a massive stablecoin bill that just got voted on and passed in the Senate, it goes back to the House. There are a lot of things to discuss. Paolo, welcome back to Bankless.

• 5:29Speaker 00

  Thank you for having me, guys.

• 5:30David Hoffman?

  I just want to get your first reaction to the passing of the Genius Act. It still has some work left to do. It has to go back to the House, but people are more than cautiously optimistic, I would say. Donald Trump sent out that tweet saying, "Guys, I just want to approve this thing. House, just get it done. Let's get this done." What was your first reaction to the Genius Act passing in the Senate?

• 5:51Speaker 00

  For us, as Tether is the creator of the stablecoin industry in 2014, we are very honored that the most powerful country in the world, the most powerful government in the world is taking good care of a technology or legislating on a technology that we created 11 years ago. So that is very exciting. I think that Genius Act is a step in the right direction. It creates a framework. Well, of course, as you said, it still needs to be passed by the House, but seems there is a good momentum. So it creates a strong framework for domestic stablecoins, as well as foreign stablecoins like USDT that could find in Their ability to meet the requirements through comparable regimes.

• 6:34Speaker 00

  So we think that Tether USDT is in the right spot to comply as a foreign insurer. And also, as I announced, I think a couple of months ago now, we are looking at creating a grassroots domestic stablecoin in the United States. So the Genius Act creates a very, very high bar for everyone. That's the thing that I think I like the most and it's very fair. In a sense that it creates a very high bar when it comes to AML and compliance. Yesterday, there was a huge news of Tether collaborating with the Department of Justice. Tether was able with its own means, almost one year and a half ago at this point, to identify through its monitoring technology.

• 7:18Speaker 00

  We built, I think, the most amazing technology for monitoring our secondary markets in the blockchain ecosystem when it comes to stablecoins and specific USDT. We were able to identify a big blockchain scheme. And when we did that, we immediately notified the law enforcement, i.e. the DOJ, and they agreed with our analysis. We proceed to the freezing and now, basically, the DOJ is in the process of receiving this money and working on restitution. So these are great examples of what Tether does. We collaborated with more than 250 law enforcement agencies across more than 55 different countries. There is no financial institution that has these numbers. So we are happy to prove more and more and keep raising the bar.

• 8:01Speaker 00

  And when I see that those type of requirements in the Genius Act, I'm very content because I think that we are doing that best than anyone else. The requirements of strong financials are also very good. No one wants to have another Terra Luna. Tether has more than $125 billion in treasuries. It's growing, you know, over the last, all the data set stations. We have been growing our monetary base in US treasuries. So we are going in the right direction. So we think that, you know, that having a requirement for a strong balance sheet is very important. Tether has, in this moment, as a group equity, has around $176 billion.

• 8:40Speaker 00

  Billion dollars in front of one hundred fifty five billion in market cap of the stablecoin. And precisely, we keep just on top of the single reserves of the stablecoin, of the one hundred percent of reserves of the USDT stablecoin. We keep around six billion dollars in excess, right? Compared to the standard banking system that usually goes in fractional reserve up to ninety percent. So they keep only ten percent of liquid assets. Tether has like one hundred and something percent, like one hundred and five percent of liquid assets as reserves of the stablecoin. On top of that, we have another fifteen billion dollars as a group equity to add. So it's very unprecedented and, you know, so we are basically, in general, we are very excited.

• 9:25Speaker 00

  Of course, you know, we, we need to see the final form, also to proceed with our domestic, with our intention of the domestic stablecoin. But, you know, I just, I just want to applaud the, the efforts that have been done by, by Senator Agatha Ilamis and all the others, David Sacks, Bo Hines. Yeah, and the rest.

• 9:44David Hoffman?

  Assuming the Genius Act gets passed as it stands today, what opened, what doors opened for, for Tether downstream of that? Like what happens next? What's your guys' strategy post Genius Act getting approved? And also, is there anything in the Genius Act or not in the Genius Act that you would have liked to have seen? Like what's your biggest, what would be your biggest amendment to the Genius Act, if, if any?

• 10:04Speaker 00

  So I think that the Genius Act would provide the clarity that everyone needed in order to operate more safely. So first of all, we come from the last four years, not as Tether, but as an industry. We come from the last four years where was clear this thing called Operation Shock Point two point O. Where the OCC, where the, you know, the administration and they were against crypto. So banking was, crypto banking was not very much possible. And when they tried, like remember two thousand twenty three, when, you know, our major competitor almost died because of Silicon Valley Bank and Silvergate. Signature all targeted by, you know, the, the Operation Shock Point two point O, but nevertheless almost killed our competitor. So that's not very good.

• 10:50Speaker 00

  So I think that the new administration is creating a framework that ensures that there is support from the institution, the administration, from the federal authorities for crypto banking. And so that will improve the safety of the industry as a whole. So we are very excited about that. The Genius Act is also giving the opportunity to other players to step in, right? I mean, to me, when I see all the consortium banks, JP Morgan, Amazon and Walmart and others are declaring that they want to create a stable coins, everyone, their sisters now want to create a stable coin. That's great. I mean, the more the merrier, like welcome player to, as I said on X,

• 11:33Speaker 00

  because I think that the beauty of it is that unfortunately, so unfortunately, all these competitors will focus on the US markets, that, you know, the way I describe it is like, there is such an opportunity globally, that the opportunity is insane. There are 3 billion people in the world that are unbanked, and Tether covers 450 million users now, but all the rest are like, you know, there is so much to do. And so the opportunity is big, but what I feel is like most of the competitors will compete, keep competing in the US and Europe, because they are the long hanging fruits. And in a way, in a certain way, when it comes to profitability, it's great for Tether, but also it's not great for the industry itself, or it's not great for the end users,

• 12:18Speaker 00

  because technically you would have more competitors, so that you can bring the efficiency at higher level, and also the cost at the lower level.

• 12:26Ryan Sean Adams?

  I do think Tether has done a fantastic job outside of the US in particular, to get, you know, recruit new stablecoin users, and the usage metrics certainly show that. Paulo, I want to make sure we get details on kind of your plan post Genius Act, because there are multiple paths now, it seems, that Tether could take. And let's just assume the Genius Act passes. In fact, I was looking at Polymarket this morning, we've got 80% probability on Polymarket, okay, that the Genius Act passes. That's the best it's ever been. I was thinking about last time we had this conversation with you. It was February 2024, and that was just a completely different world with respect to US and its relationship to crypto, not to mention stable coins. We had Operation Choke Point.

• 13:07Ryan Sean Adams?

  Anyway, okay, let's talk about the path forward for Tether itself, USDT. We talked to Senator Bill Hagerty yesterday, who's a co-author of the bill, and we asked him specifically about Tether, and this is what he said. "If an offshore issuer like Tether wants US market access, our bill lets Treasury run a comparability test, and if their home rules match ours, they can keep operating. Otherwise, they'll need a US subsidiary that meets the same reserve and disclosure standards as everybody else." He further said, "Tether can start complying tomorrow." So can you give us the details on kind of what's your plan? So you have USDT, which is currently not compliant. It seems like there could be a path to get USDT compliant.

• 13:49Ryan Sean Adams?

  In order to meet that path, you have to go through some additional auditing rigor. You have to refine your Treasury, maybe be more domestic, be more onshore. I'm not sure everything that goes into that, but there is a path there, and you could acquire an OCC license for that. There's also the path that I think you have announced, which is to create a domestic Tether stablecoin. That's a separate type of asset that is really focused on the US. And then I guess you would preserve USDT? This seems to fracture liquidity, though. Anyway, give us a sense of what your plan is in some more detail here.

• 14:24Speaker 00

  Right, so our interest is, and I think that even with USDT, actually with USDT, we plan to follow that pathway to meet the requirements.

• 14:35Ryan Sean Adams?

  Okay.

• 14:35Speaker 00

  I think that if you have a company, and last year we made 13.7 billion in profits, and this year, I think we're going to beat that.

• 14:42Ryan Sean Adams?

  Wait, 13.7 billion in profits?

• 14:46Speaker 00

  Last year, and this year I think we can do a little bit better. Look, only with... Only having one hundred fifty five billion dollars, you know, the Fed didn't cut the rates. We have been saying that for a long time and, you know, kind of was true. So the rates are still around five percent. So you you do the math, it's, you know, give or take seven point five billion, just just because of that. And then all the rest, we're doing all the other investments. So like, you know, we we have been investing gold and Bitcoin and all that, right? So it's, well, this year, I think we are going to do much better. You know, still, the the year is long, but, you know, do you, why people do think that we don't have the ability to meet with the requirements? Because, not saying that you said that, but the, I saw that on on X, right?

• 15:31Speaker 00

  So people think that we are going to let it go, we are going to not continue to support the best businesses in the world. You know, why is that? I mean, again, we have the profitability to, and by the way, we are acquiring more treasuries than anyone else, apart maybe a couple of countries. But, you know, the the pathway is is there, like last year, we were the fifth largest purchaser of US treasuries.

• 15:55Ryan Sean Adams?

  Okay, uh, uh, uh, just, people don't appreciate the stat. The fifth largest purchaser of US treasuries, and that's taking into account all of the countries that are purchasing US treasuries as well. So number five ranked with like entire countries.

• 16:10Speaker 00

  Yeah, and we are in total, overall, the eighteenth largest country, we are not a country, but holding US treasuries. So that's the power of stable coins, and I think that President understood that very well, the President understood very well. It's is one of the best aids to the US economy. And, look, think about it, the one thing that is is very powerful about USDT compared to everyone else is that USDT focuses outside the United States. But also means that it's people outside the United States are purchasing USDT, and with that money, we purchase US treasuries.

• 16:52Speaker 00

  So in a way, is people is, we are desensitizing the ownership of the US debt so that you don't have one single guy like Xi Jinping that can press a button. And sell them all together. It's 400 million different brains that will not act all together. And that is great service first. But also, I think that is much better for the US to have the debt of the US not owned by US people. Otherwise, I think that that is kind of the recipe for disaster. So you want people outside the US owning the US debt. And so that is also what that is making. So we have, as I said, as I think Senator Hagerty is right, right? There is a pathway, there is a process, right? So there is a pathway that you have, there is a comparable regime reciprocity.

• 17:35Speaker 00

  It will take a bit of time because, you know, countries have to create these regimes. And then what I think will the Genius Act do is exactly this. Will open the path for every single other country in the world to adopt the Genius Act. Almost exactly like that. So that there are, the US is the greatest country in the world. So everyone will copy that because if you think about it, apart UAE, I mean, Europe has a very, very bad regime. With like 60% of reserves that has to be kept in uninsured cash deposits. That's what happened to our competitor with Silicon Valley Bank. So you don't want, Europe has a bad regime, but everyone else like UAE has a very similar regime to the Genius Act.

• 18:17Speaker 00

  And, you know, Singapore is dipping their toes in the water. But when the US will pass this, I can guarantee you that every other country will follow. And that will open a path for reciprocity.

• 18:30Ryan Sean Adams?

  Okay, so but on USDT then, it sounds like you're saying your primary plan is to just get USDT compliant with the Genius Act. And so, you know, but, but if that's the case, then why, why launch a domestic on like on US shore asset as well? Why have two? Is that just for redundancy? Is that like a backup plan?

• 18:49Speaker 00

  No, it's, it's a great question, but you know, the, I think that serves two completely different use cases. The, the way I see it, maybe it might be controversial, but I think the US will be a market where stable, the current stablecoin business model will not work. So of course there is a lot of frenzy now in the US because of the Circle IPO, but no one will make money in the US. Very, it will be a race to the bottom on making the money on, on stablecoins in the US. Sure, it, it, look at when exchanges, crypto exchanges starting in 2012, well, 2010, around 2010, right? And Bitfinex was in 2012 was making 20 basis points in, in fees. Every trade.

• 19:32Speaker 00

  Now, you get one basis point is a taker fee compared to 20, like 10 years ago or 12 years ago. And, you know, it's basically a race to the bottom. When you have, look at the US. US is the market in the world where there is the highest efficiency as money rails. So you could argue that US has 90% efficiency to a financial rails. So if you add a stablecoin in the US, you will bring the efficiency from 90% to 95%. So the premium that people will pay for that is very little. If you are in another part of the world, you are like Nigeria. The efficiency of financial race is like 20%.

• 20:16Speaker 00

  If you add a stablecoin, you get to 50%. So you have an increase of 30% of efficiency. So that is why, you know, people in emerging markets are happy if they leave to us the, the, the interest. Simply because the intraday volatility over the national currency is higher than 4% that you can give them on a yearly basis. So to me, it's important to have a distinction between, you know, two products, two use cases. Basically, to me, in the US, stablecoins will become at some point tokenized money market funds. Like I was seeing this JPMD, it will be, be kind of like that. And like every other stablecoins will be coming like that, where basically the entire yield will be shared back.

• 20:58Speaker 00

  And so to us, then, in order, the stablecoin in the US that we want to create has to compete on a different level. Has to compete in programmability, has to compete in services, has to compete not with, it does not, cannot compete with the same business model that we have for USDT. That is a stablecoin that is made for the foreign world.

• 21:19Ryan Sean Adams?

  I see. So you're still thinking two products potentially because they will serve two different use cases. But you're also saying that you, you do intend to get USDT compliant under the Genius Act as well.

• 21:31Speaker 00

  That is our intention, yes.

• 21:33David Hoffman?

  There's a growing conversation about domestic stablecoin issuers. There's been a bunch of rumors about things like Amazon, Walmart, even like Meta, Twitter, launching stablecoins. And we also know that like JP Morgan, City Wells Fargo are also, they're exploring this consortium stablecoin, kind of feels like Cope to me, but that's just my opinion. There's gonna be a lot of domestic competition coming out. So if large US banks can mint deposit, tokenize deposits that settle against Fed balances, what moat would you say Tether still has in five years after this becomes pretty commonplace domestically?

• 22:06Speaker 00

  So there is still a lot of potential with our distribution partners and our own distribution networks, right? So again, the, the thing is that banks usually would sell their stablecoin to their own customers. So I don't see a bank breaking, you know, banking employees breaking their back in the streets, you know, doing educational stablecoins and going to basically the normal people or the people in the lower west tier or a tier of richness. That always was our approach, right? So we never went to, when we open a new country, we don't go to, you know, the local biggest bank like our competitors. We go, we do education in the streets, we work in the streets, we explain how, we do

• 22:50Speaker 00

  education in schools, we, we, we go door to door, basically. We find the, the partners locally that are aligned with exactly this vision of grassroots adoption from the bottom up. And so that is also possible. I mean, although the US has great financial rails, still, you know, the, I was reading that, you know, the people struggle even to keep bank accounts open. So more and more in the US, you will have a tier of population that will benefit from a product that has our more like, more direct approach to people rather than, you know, sitting on an ivory tower and, you know, just thinking that the world is the same of 20 years ago.

• 23:30David Hoffman?

  Now, I want to bring up the conversation of the Circle price post IPO, launched at $31, now trading at $200. I saw some napkin math on Twitter that if Tether was given a commensurate valuation, Tether would be valued at something like $3 trillion or something like that.

• 23:46Speaker 00

  What?

• 23:46David Hoffman?

  What's your, what's your reaction to the, the price action of the, of the Circle post IPO?

• 23:52Speaker 00

  It's great. I mean, so we don't, we don't want to go public, first of all, because I mean, companies that want to go public do it for two reasons. Either they need to have access to capital, but our profitability is so high that we don't need that. And second, we would need, and by the way, we are invest with our profitability, we invested, I think, in the last two years, more than $5 billion in the United States. That is something that is very little mentioned, but is very important. It's like, so we are giving back also to, to the country that, that, you know, has created this great currency, like the US dollar. So, but, you know, you, you go public because you want to have access to cheap capital, or because, you know, the shareholders wants to have an exit.

• 24:37Speaker 00

  And we don't need either, right? So we have great profitability and at the same time, we don't need an exit. We need, I want to stay in this company forever. I, you know, we are, we are having fun, we are, we are enjoying, we are, we think that it's almost like we just started this company because there is so much to build, the same, so much to prove, so much, many more, more ideas under, you know, same, same concept of EST, but different verticals, different sectors, like in terms of disruption, right? So disruption for the benefit of, of the people and not, not the, a few corporates. And so the, but when I see that multiplier, I was like really thinking, well, that's a nice, that's a nice multiplier because, you know, but some, at some point you have

• 25:20Speaker 00

  to, you know, price what you are doing and if that is comparative, that is, that is a great price. I mean, we'll see what, how, you know, how long it will last, but for us, couldn't be better.

• 25:34David Hoffman?

  Going back to this notion that Tether is sitting shoulder to shoulder with countries when it comes to owning US treasuries and then this imply, you know, not really fair, but implied valuation of multiple trillions of dollars. Does it stress you out, the magnitude of what you're building and what you're doing? Like if I was managing enough treasuries to, you know, be considered a country in terms of just like geopolitical weight, that feels like a lot of pressure. Do you ever like, do you stress out about this? Do you worry about this?

• 26:06Speaker 00

  It also ties into, you know, sometime people, you know, there is this old fad of, oh, Tether, you know, even in the respect of what I saw on Twitter in the last recent days, it's like, it's almost like people still think is, you know, it's 2014. People think, oh, maybe Tether, you know, Tether wants to hide and all that. We keep our money in Cantor Fitzgerald, that is a prime US institution. We keep 120-plus billion dollars in Cantor Fitzgerald in US treasuries. So we are not hiding ourselves, we keep our money in the United States. That's going back to the Genius Act, right? So it's not like, oh, Tether wants, does not want to comply or all that. I mean, we keep already our money in the US.

• 26:51Speaker 00

  And so the EU has basically control over our money because it sits in one of the most regulated entities in the world. That is primary dealer, that has a direct connection to the Fed and all that. So the reason why we are, we keep our money in Cantor Fitzgerald is because, is, is because I can sleep well at night. Because, you know, they, they have a direct connection to the Fed. We have a great line with overnight reverse repos and repos. So it's, it allows us to be comfortable if we get, you know, tens of billions in redemptions. We can meet them without problems. And that, that's, I think, the beauty of the setup.

• 27:32Speaker 00

  And I think that the de-assembly station and the Genius Act will help in making this industry even more solid.

• 27:38Ryan Sean Adams?

  Paulo, I think investors right now are really trying to figure out what's the value of this whole stablecoin thing, right? So like, you, you could see Wall Street, you know, they're, the gears are grinding as they try to value Circle. And I think everyone is just like, stablecoins have just come on the radar for a lot of investors. And this has been silent in the background, just growing and growing and growing every year. And I think Tether is finally getting a spotlight. I mean, Scott Besant, the Secretary of the Treasury, just, it seems to have come on his radar that this is a big net buyer of bonds. Anyway, when it comes to valuation of stablecoins in general, right? We're talking about a $45 billion market cap for Circle. David just read-

• 28:16Ryan Sean Adams?

  About the numbers, that's on like 150 million or so in annualized net income and annualized profit. You just said you were generating 13 billion. Okay, and that was last year and you said you expect this year to be bigger than that. And so I'm just like calculating the numbers. David, David said three trillion, which is interesting. That would, that would place tether in the top five of all companies. I mean, just below what Nvidia, Nvidia and maybe Apple and Microsoft kind of in that camp. But it's not inconceivable based on the cash that you're, you're throwing out. And then there's also this vast, very strong treasury as well.

• 28:57Ryan Sean Adams?

  Anyway, I, I know it's a, it's an interesting question for you to ponder, but now you have public market comps of a pure play stablecoin company and it's trading, God knows how much, I don't know, 200X profit, something like this PE ratio. So what like, what do you think tether is actually worth today?

• 29:16Speaker 00

  To me a lot. So, so that is.

• 29:19Ryan Sean Adams?

  I should say so.

• 29:21Speaker 00

  Yes, to me a lot, but because it's, it's so, it's my baby, right? So it's, to me is, is worth a lot. But look, I, I don't know how sustainable, I mean, I don't know how many companies sustain 200X. And again, if they can continue to sustain 200X is great, is great for, for, for us. I mean, as, as comps, as you said, we are, we are not seeking for, for, you know, we are not actively seeking for investments. So we don't need to raise money. That's the problem. So it's, we'll see. I mean, but it's, it's just nice, it's, it's nice to see, right? It's nice to see because in the end it's an industry that we feel we created with in 2014.

• 30:02Speaker 00

  And so we're just proud, like we, it's every day I wake up and pinch myself, you know, looking at these numbers. Like I come from a town with 600 people and living there and with cows and, and chicken roving. And so like these numbers are out of this world. And I think it's, you know, just the entire, this is actually the achievement of an entire industry, including the crypto industry. You know, we, we went so far. We improve, we have, we had ups and downs. But there are so many people that were stubborn and kept going even in the difficulties and built all this. So, you know, it's, it's a congratulations to everyone, I would say.

• 30:40Ryan Sean Adams?

  So let's talk a bit more about winning kind of the, the next phase of stable coins, right? Because right now, I think it's safe to say Tether has won phase one. And that has been, well, stable coins have been primarily crypto native. Genius Act means we're entering a phase two. David mentioned a whole bunch of US companies that were talking about getting into the stablecoin game. All of the banks, these are your new competitors, right? So, so welcome to that. Now the banks are going to have a play at this. So will the tech companies as well, something like Meta. I read an interesting post from Arthur Hayes, it was just on stablecoins. And he makes the point that stable, the stablecoin game is all about distribution, right? And Tether came out first, came out early, really pioneered the sector, had all of the crypto native distribution.

• 31:22Ryan Sean Adams?

  Fantastic, I think saturation and offshore, you know, Tron is a fantastic distribution networks. It, it seems like for Tether, 80 billion Tether on Tron alone and a lot of usage and payments there. Anyway, the next phase of this whole stablecoin game, you're going to be faced with big tech. You're going to be faced with companies like Meta, because Meta have over 3 billion users, you know, like worldwide. And so it's a new chapter. How do you win the next chapter with respect to distribution of the Tether stablecoin?

• 31:54Speaker 00

  Well, one, one thing is interesting, maybe, you know, again, the genius act is not, maybe, you know, we, we need to wait. But it seems like companies like Meta might have an hard time to launch a stablecoin. Given, if I'm not wrong, given the genius act, right? So there is kind of sort of a prohibition. If you are not primarily involved in, in finance, there is kind of a sort of prohibition. If, you know, that, that is at least my take from, from the language that is so. So that is going to be interesting how it will play out. So I think that big tech companies will need to partner with existing stablecoin providers or with maybe banks in order to support, you know, someone else's stablecoin and get a rev share for sure.

• 32:34Speaker 00

  But that will create a very interesting dynamic because I, again, it feels like Meta or similar, you know, will not be able to launch a stablecoin. Again, I could be wrong given the language, but I think I got it right. And so, but when it comes to distribution, people, you know, Tether has more than 100 companies in its portfolio investments done with Tether investments, not as the reserves. And so that is where part of the profitability goes and went. So that gives us a enormous distribution channel. And think about, think about the US domestic stablecoin. Rumble will launch a Rumble wallet and has 70 million users. It's not bad to start with, you know, it's a good bootstrap.

• 33:17Speaker 00

  You know, I think that is pretty much how many active users, well, much more active users than probably the biggest exchange in the US. So it's a, it's a great bootstrap. And then there are other opportunities that, that, that we invested in, like where that could, that actually built and helped Tether to build in the last 11 years, the biggest distribution network for the US dollar in the history of humanity. So we have millions of physical touchpoints around the world. So the reason why Tether is the leading stablecoin and has such high metrics like 450 million users, we grow by 30 million new wallets per quarter, and we, we publish that data. We have this website called usdt.network, where we publish the updated data.

• 34:02Speaker 00

  37% of our users are savings accounts, for example. So we have, we collect all these statistics. The reason is because we are actually growing, and we have been building this distribution network that, that is unprecedented, is granular, is with boots on the ground, or reached really the smallest village in Philippines, or, you know, we, we, we invested from remittances companies to bodegas in Central South America, to building kiosks in Africa. So, you know, just in Africa, you know, we build, we are building, we did this pilot with 500 kiosks with solar panels on top and rechargeable batteries inside. In Africa, Four hundred million people don't have, six hundred million people actually don't have access to electricity.

• 34:47Speaker 00

  And so we build these kiosks with solar panels on top and batteries inside. We sell subscriptions for thirty USDT per month to, to, to the people in these villages. And we have around five hundred thousand users already and ten million battery swaps. And by two thousand and two thousand twenty six, we're going to have ten thousand kiosks and end of two thousand, two thousand thirty, we're going to have one hundred thousand kiosks. So we are going to touch around thirty million households by two thousand thirty. It means that one hundred and twenty million people on average in Africa. First of all, is a change that you can see from space because you light up a continent. And also, you know, you have one hundred and twenty million people that are going to rely on a day-to-day basis on the US dollar in the form of USDT.

• 35:31Speaker 00

  That's how you bring the US dollar gem money farther and you bring it to the emerging markets. That's what we, you know, what boiled in, in, in our pot for the last many years. And that is one of the least understood things about Tether.

• 35:45Ryan Sean Adams?

  I was gonna say, I just like as going over these stats that you were talking about, and this is all on usdt.network, right? Four hundred and forty million total estimated users of Tether. I, I feel like the entire US has been sleeping on this use case. I mean, there's been so much talk of crypto not having a killer app. It being just kind of, you know, speculative casino, just, you know, Bitcoin, that kind of thing. We have four hundred and forty million users using the US dollar. How did this first phase of distribution happen? Was it all kind? It wasn't, it can't have been all an emerging market type of story, right? It's like, can, can you explain these numbers to people who are seeing them for the first time?

• 36:28Speaker 00

  Actually, it's funny because if you can scroll down a little bit to the chart of the growth of the market cap here, right? Look at two thousand twenty. And what happened? Do, do you know what happened in two thousand twenty? Do you remember?

• 36:42Ryan Sean Adams?

  Oh, yeah, we had a little, uh, global pandemic. You talking about that one?

• 36:46Speaker 00

  So, and, you know,

• 36:48Ryan Sean Adams?

  For people who can't see, we are at four point seven billion Tether in two thousand twenty.

• 36:53Speaker 00

  Yes. So, and this is in retrospect, right? Because we didn't have a marketing team until 2022. So, and look at the growth up to 2022. So, the reason why that happened is we, we understood recently, we went back and we, we, we did a lot. We asked a lot of questions to ourselves and then. So, think about the emerging markets developing countries. They have two common denominators, you know, well, three. They are in general poor, they have this high, you know, high inflation, higher than, of course, the welfare countries. But they have two other things. They have good penetration of smartphones and so they're still very digital. And they have more children, so they eat more youth, younger population.

• 37:38Speaker 00

  From 2017 to 2020, this youth is the one that learned about crypto before anyone else. And in the meanwhile, when the, when in 2020, when the pandemic happened, something changed. The parents of these kids were going to street in the streets with the pandemic. The pandemic accelerated the loss of jobs everywhere, but especially in emerging markets. Like in the US and Europe was bad, but in emerging markets, the pandemic accelerated the loss of jobs. Increased inflation and it did all that, right? But, and so what people did more and more during the pandemic with the fear was going out in the streets and buy cash dollars.

• 38:19Speaker 00

  Because if you live in Argentina with the, at the beginning of the pandemic, the Argentinean peso started to tank. And then you get scared, you want to, you lose, you are risking to lose your job because of the pandemic. You cannot go to work, you go out in the streets, in the black market, you buy cash dollars. But the kids in 2020, look at their parents going out, knowing that there was the pandemic. Parents putting themselves even more at risk, going to the black market with the pandemic. And the kids were like, Dad, why are you going out to buy dollars? I have dollars in this app. That's how it all happened. That's crazy and it's very humbling. But it's how it happened and the charts prove it.

• 39:02Ryan Sean Adams?

  What apps are they using for this? Is this kind of like crypto exchange type apps? Are these like, you know,

• 39:07Speaker 00

  Everything.

• 39:08Ryan Sean Adams?

  MetaMask wallets? Are these just wallets that are connected to Ethereum and Tron?

• 39:12Speaker 00

  It's like local exchanges, you know, small. I mean, a variety, like an infinite number of wallets. Like, we never said, oh, use this wallet, use that wallet. Like, it's truly, when people are in need, that's the issue with Europe and the US in a certain way, right? So we still live in a situation that is better than anyone else for most of the people. Because we have our problems, but, you know, again, that is far better than, and everything is relative. And we are still far better. Our economy does far better than anyone else. That's the reality. And so when you are in need, when your family is at risk, when you work from January to December for 12 months and at the end of the year, you're poor compared to the beginning of the year

• 39:55Speaker 00

  because your value, your currency devaluated so fast, you will find any possible way to save your family and to protect your family. And that is exactly what happened here. People find, found ways to go out and, or, sorry, to find ways to hold dollars and to have access to dollars through local exchanges, through Binance, through, you name it. But they found every possible way through the kids. Because again, the kids were playing with crypto because they're young kids. They try everything, they know everything. They're small hackers and growing, right? So they, and then word of mouth. Because one parent goes to the other parent and says, well, you know, we, you know, I did this, I'm testing this, I'm buying dollars on this app.

• 40:39Speaker 00

  And so that's how it went.

• 40:41Ryan Sean Adams?

  So how much do you think tether market cap is tied to the total market cap of all of crypto? I mean, there seems like to be some correlation there, right? Say, you know, got massive acceleration up to 2022 and then we had kind of a dip. It didn't go all the way back down, but slightly. And then more acceleration. Is it tied to crypto market capital?

• 41:01Speaker 00

  I honestly, I, I mean, I think that right now, only less than, I mean, we are running some statistic around that, right? But I think that from what we see around, less than forty percent, to be conservative, less than forty percent of our market cap is due to crypto. So the rest is actually grassroots usage of, of U S T in emerging markets. I think that the next leg of growth of U S D T market cap is commodity trading. Like every single, the biggest commodity traders are pinging us, calling us. Because for them, U S D T is the best thing after sliced bread. Because when you have, you do, you need to do, you need to do international trades and you are relying on, on the slowness of banks, the efficiency of capital is very

• 41:46Speaker 00

  bad with the, for, for, for commodity traders. And now they are looking at U S D T as a solution to make their portfolio infinitely more efficient. Because if you're a commodity trader, usually the commodities are both from the emerging markets. So if you are a commodity trader, for you sending U S D T or a pigeon or whatever is accepted by the, the seller is great, but you just want to make sure that the seller will receive the, the money as soon as possible so that you can move on to the next deal. So for them, for the commodity traders, U S D T is great. For the seller, the seller is in the emerging market, so will get U S D T and will find a user base for U S D T directly in the market. So they can pay salaries in U S D T, they can do everything in U S D T.

• 42:32Speaker 00

  And so, look at Bolivia, I posted a tweet about Bolivia one week ago or so. You have in Santa Cruz and, and other villages in cities in Bolivia, like in the shops, there are like, the, the price tags are in U S D T. We did, we, we never went there, we never been there, we never had a person in Bolivia, all happened organically.

• 42:51David Hoffman?

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• 43:34David Hoffman?

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• 44:17David Hoffman?

  And with some of the lowest fees and deepest liquidity in the market, it's no surprise why over 275 million users trust Binance for everything crypto. Download Binance today and get started in minutes. Binance is not available in certain countries, including the United States. Check its terms for more information. I want to turn the conversation to Tether Ventures, because you're doing a lot over there. There's a lot of different investments going on out of the Tether portfolio. And then now there are investments that make sense that I definitely want to talk about, things like Plasma and Stable, these like Layer 1 chains that are specific for Tether. But then there's also just a bunch of more kind of like eclectic investments that you guys make. There's acquisition offers for basically like mobile networks, telecom networks, OnRamps, and just other infrastructure companies there.

• 45:01David Hoffman?

  Are energy startups in the Tether portfolio? There's like these media tech companies like for the the help creators make content out there. And I believe you guys also own an Italian football team as well. So there's a bunch of like interesting investments coming out of Tether Ventures. Maybe can I just talk about that strategy going on there?

• 45:19Speaker 00

  Yes, I mean, the portfolio is is big, right? So you have you have to create the different verticals. So as any good portfolio, you know, that is again outside the reserves. And for any good portfolio, you have a part that is very conservative and very stable. So we buy some Bitcoin and gold with that. But also, we started recently to buy land and agricultural companies. So this company called Adequagro that is listed on the US market. They are the biggest or one of the biggest land owners in in South America between Brazil, Argentina and Uruguay. And they are producing also there is the and well biotanol, but also there is rice and cattle stuff.

• 46:04Speaker 00

  Why that, right? So first of all, land is a very scarce and safe asset. And historically, it's slowly, slowly appreciates, right? So part of your portfolio you want is something like that. It's something that humanity will always need, like land and agriculture. But on top of that, you have to think about the fact that, you know, this agriculture is commodity. Commodity trading could be, you know, what I said about commodity trading and USDT can be applied also to agricultural commodities. And so USDT and stable coins in general will expedite also agricultural companies to have better, you know, efficiency when it comes to access to capital, but also when it comes to just payments for the goods that they produce.

• 46:47Speaker 00

  So that is a very interesting combination between the two things. Then we have another silo that is new technologies, artificial intelligence. It's one, we are building our own peer to peer AI platform called Qvac. It's gonna be insane and very, very cool, really unstoppable AI. I I I think that with the way I like to describe it is like the comparison between when you had the When I was in the elementary school, you had like the, the, the teachers were forcing you to do like calculations by mind, right? So the sum, the divisions and all that. Then the Casio calculator started and I don't know now, but you know, most of the people that I meet, they, they might not be able to do simple math in, in mind.

• 47:28Speaker 00

  And so, and imagine like, and that is, so we lost our ability, many people lost their ability to do in mind calculations. So imagine if, and because you have a replacement for that, imagine if you have the same thing for, for, for intelligence, right? So, so you, you think less because you have an aid now. Now, it's fine because that is where the future will go. But what you could say about not your keys, not your coins, you could say also for not your AI, not your intelligence. In a sense that you don't own, if you give all your data to a big corporation that also owned your intelligence, that is not becoming more intelligent. It's becoming dumber and making more money and become to the other company. And so that also that company will become more intelligent.

• 48:10Speaker 00

  So our ability and given our balance sheet and the, the fact that we are a very unique company that has the technology capabilities, but also the capital to build whatever they want. We, we are trying, going to trying to build technology and AI platform that will bring AI closer to the people. So this AI platform will run on every single device, can adapt to the GPU of the device, working from, from a $30 smartphone to like a flagship phone, to any laptop, to any server, right? We'll just automatically decide which model to use, which number weights to use and all that. So we've been invested in biotech, there is this company called BlackRock Neurotech, doesn't do anything, and it does not have anything to do with BlackRock.

• 48:55Speaker 00

  We're going to change the name. And you know, the, you know, the idea is like, to me, brain-computer interfaces are very interesting because are the, the ultimate hedge against the robots killing all of us. So I think that humans will need to become more intelligent and have, but in order to become intelligent, they, they need to have a mathematical co-processor in their brain that will not share all their thoughts with OpenAI, right? So the idea of combining local intelligence plus brain-computer interface is very exciting to me. I'm a big sci-fi nerd. I mentioned the football club. Well, yesterday Juventus won 5-2-0 in the, in their first match of the US World Championship for, for clubs. So great start.

• 49:39Speaker 00

  That so, you know, that is an Italian football club. Myself and Giancarlo have been football fans. I mean, the investment compared to our portfolio is not that big.

• 49:47David Hoffman?

  Right.

• 49:48Speaker 00

  So, but we are football fans for Juventus.

• 49:50David Hoffman?

  That one was more for fun, just a little bit of fun.

• 49:51Speaker 00

  Yes, but if you think about it, it could be an insane distribution channel. Juventus fans are everywhere and and scatter all over the world. So actually, we could bring more football fans to Juventus through our network. Plus, you know, Juventus network could be beneficial to that in longer term.

• 50:07David Hoffman?

  When you're looking at a potential investment, is distribution the first thing that you kind of evaluate? It's like every every investment that you make, you distribution is kind of the top of the list of things that you care about.

• 50:17Speaker 00

  Yeah, exactly that. I mean, even if with AI, the AI platform, I think that I think that AI, we are going to have one trillion AI agency in the next fifteen years. And every AI agent should have a non custodial wallet. I doubt that, you know, any AI agent will have an account at Fed or or in JP Morgan, right? So so we are building this SDK called WDK. It's Wallet Development Kit, will be fully open source and will allow like everyone to build full non custodial wallets. We don't have any keys. You can create any model you want, will support all different blockchains. And the idea is that paired with our AI platform, I want basically, I see a user experience where I have my smart fridge. Shows shows me a QR code. I the the QR code is linked to like a non custodial wallet.

• 51:00Speaker 00

  I give like fifty dollars to my fridge and the fridge will just do groceries for me, right? So but I I don't want basically my fridge money to be in PayPal, right? So that I don't think is is the right experience. It's also because if you have, you know, billions of equipments and even I see a future in twenty years where light bulbs should have a very, very tiny AI that will understand what is the best level of of electricity to use and the best lighting for that specific moment in time in the ambient. And we're going to go there, maybe not in twenty years, maybe in thirty years and forty years. So that's the reason why we are doing local AI. I don't think that every single light bulb can be connected to ChatGPT. We'll crash the servers of ChatGPT, the latency will be insane and all that. So local AI is going to be very important.

• 51:44Speaker 00

  Plus, giving a wallet to local AI is going to be very important. And if you have a stable coin to add to that wallet, it's gonna be great.

• 51:53David Hoffman?

  There's a couple of investments that Tether has made that has hit the zeitgeist on the crypto side of things. Plasma, Stable, there's a bunch of Layer Ones that are trying to become just Tether-based Layer Ones. Notably, fees on Tron have really kept up recently. I think the average fee on Tron is something like $4, $4 or $5, which as a payments blockchain is just not going to work. And so Plasma, Stable, like I mentioned, a few others are all trying to be a payments blockchain that's Tether-specific. And Tether has invested in all of these. Are any of these supposed to be the Tether chain? Or how do you think about this investment into a handful of Tether-specific, high-throughput blockchains?

• 52:34Speaker 00

  There is no Tether chain, and I don't think there will be ever a Tether chain, but there are good opportunities and good teams that can build great ecosystems. So I foresee, you mentioned higher fees in certain chains, and that varies over time. Sometimes the chain has high fees, sometimes it has low fees. I foresee a future, and I never see this user experience, and I'm trying to, I want to craft it in some of the wallets. Tether might launch a wallet by the end of the year. We'll see. But, well, actually, I never said it before, so.

• 53:07David Hoffman?

  That could be breaking. Might launch a wallet on a particular crypto network? Or will it support many networks?

• 53:14Speaker 00

  No. It will support every network. But one thing that excites me is that we want to launch it with WDK, right? So everyone can actually build a wallet like ours. We don't want to make money with a wallet. Actually, I would prefer to not launch a wallet, but I want to make sure that there is a good product out there. Right? And imagine a wallet, and we are still, I'm still thinking through it, because, again, I never heard of it, maybe someone else is already doing it. But given that now we have been working with grassroots community projects like USDT Zero and similar, USDT Zero is a very cool project, and they're building this cross-chain, cross-chain layers. Imagine a future where you have a wallet

• 53:57Speaker 00

  or multiple wallets, and basically, these wallets will use these cross-chain swapping facilities to swap part of the USDT of a user to the chain that has lower fees.

• 54:10Speaker 00

  So in a way, you create an incentive for chains to have always lower fees if they won't hire TBL. So that is a level of user experience that I think at Tether Wallet or WDK, so every wallet that will build on WDK can enable, and I think is the best thing for the end user. Because we want to have fair competition across the different chains. We want to see like an ecosystem to grow. And so that's something that, you know, as long as a chain has fair fees and low fees for USDT, that should be prioritized, in my opinion. So imagine an algorithm that will automatically start converting and moving based on certain factors, user preferences and all that, will basically create a preference for a certain chain. We

• 54:52Speaker 00

  don't decide, I don't want to have to decide, I don't want, I should not be able to decide. Every user should decide which chain is the best for them, right? That's the point.

• 55:01David Hoffman?

  The Plasma chain, the one that's kind of really caught the attention of Crypto Twitter, it's actually a Bitcoin sidechain. And really before Tether blew up on Ethereum, the supply of Tether blew up on Ethereum, it was actually on Omni Network, which was kind of like the first really expressive chain. And that was also a Bitcoin sidechain. And it was a Tether dedicated chain, really before we, as an industry, had really figured out blockchain tech. So it's a little bit, kind of like a full circle, like Bitcoin sidechain that was Tether focused, then Tether issued its stablecoin on Ethereum, the supply grew there. Now Tether is all across many different networks, and now it's investing in, you know, incubating its own kind of Tether chains, one of which is a Bitcoin sidechain. What would you say Tether's relationship is with Bitcoin? Do you guys think Bitcoin is special? Is it just another chain? You guys

• 55:45David Hoffman?

  obviously have reserves in Bitcoin, so you're obviously bullish Bitcoin. Like, when you look at Bitcoin, when you think about Bitcoin, what do you think?

• 55:52Speaker 00

  I love Bitcoin. And we, as a stater, we love Bitcoin. We, you know, it's the reason why we enter in this space. There is some poetry around how Bitcoin came about. And, you know, the fact that, you know, it's a simple chain, right? But it does what it needs to do. And especially, I love it because... I know that will work in the worst case scenario. The 10 minutes block time, people say, oh, it's very slow. And it's true, it's very slow. That's why you start having these layer twos and or like, like, like network, like Spark, Spark as a blockchain. And all these similar order, you have Plasma and you have other opportunities. So that you can, you shouldn't do payments on, on, in my opinion,

• 56:36Speaker 00

  even Ethereum is not, you know, aiming to do payments. It understands that there is a bottleneck if you do payments on layer ones, right? So eventually you need to have scalability layers and it's fine. And that's the right approach. But the true immutability of Bitcoin, the fact that is, my opinion, with 10 minutes block time is very, is very aligned with tether value in the fact that if you have a 10 minute block time and around like between one and four megabytes block size, even if you are in a village in Africa, you might have the ability to download four minutes in, sorry, four meg, four megabytes or a few megabytes every 10 minutes. Right? So even, even with an antenna is proven, you know, in the middle of nowhere,

• 57:20Speaker 00

  you can download the Bitcoin blockchain. If you have like a faster block time, it's much harder for people in the emerging markets cope with that speed. If you think about things like Solana, it's very, very hard for anyone to run a node if you are in a not super like connected country. So to me, there is, there is something that is very special to Bitcoin because of that is the ultimate inclusion, even in the worst case scenario, even in the World War III. Then I don't, I don't, I mean, other blockchains have different use cases, but it's important to distinguish the different use cases. Like, for example, Plasma is VM compatible, right? And, and or like Blockstream Liquid is another great Bitcoin sidechain.

• 58:05Speaker 00

  They are working on simplicity that is like a kind of like a Turing complete contracting system. So I like innovation that happens also outside of Bitcoin. But, you know, to, that is our first love and actually is very aligned with our mindset.

• 58:20Ryan Sean Adams?

  It's also very aligned with your treasury strategy, it seems like. So 100,000 Bitcoin on the tether treasury. Do you think you'll ever add other crypto assets to that treasury?

• 58:30Speaker 00

  The problem is that, no, I don't think, well, I don't think we are going to ever add any other assets. But also, you know, it will be a bad signal. Bitcoin is the only chain that does not have, that does not have controllers, in a way, right? It's like, so we are not playing favorites if we have only Bitcoin. If we start adding like chains where there are like foundations behind the chains and all that, feels like we are playing favorites. So for us, we stay out of trouble, just Bitcoin, you know, it's, it's easy enough, it's simple, clean, that's what we like.

• 59:09Ryan Sean Adams?

  How about Bitcoin mining? I believe Tether is investing in that area as well. Okay, can you get us updated on that?

• 59:15Speaker 00

  Yeah, we, I think Tether is set to become probably, you know, the biggest miner in the world at the end of this year.

• 59:22Ryan Sean Adams?

  Wait, wait, the biggest miner as well? So Tether is going to have the biggest Bitcoin miner in the, in the world?

• 59:28Speaker 00

  Yes.

• 59:30Speaker 00

  So there isn't, there isn't why we do, so there is this thing about Bitcoin, Bitcoin mining, right? So if you have an X amount of money to invest, you have to, and imagine you have to choose if to invest in Bitcoin mining or buying Bitcoin. Ninety-nine percent of the time, you will make more revenues, more, more profits if you invest directly in Bitcoin rather than doing Bitcoin mining. So why the hell we are doing Bitcoin mining is because if you have hundreds of thousands of Bitcoin, you want to have, or you want to participate to the security of the network because it's in a way you are protecting your treasury to participate into the, to the solidity, to the security of the network, right? So there is an incentive to do that i- if you have a huge, you know.

• 1:00:14David Hoffman?

  You'll be the most aligned actor miner of the Bitcoin network. Cause there are like, some people, myself included, I would say are, they're considering the security risks of Bitcoin when the subsidy runs out. But I think what you're saying is like, well, if we own the biggest miner and we hold over a hundred thousand Bitcoin, then we will make sure that the Bitcoin network operates just because we hold a lot of Bitcoin.

• 1:00:35Speaker 00

  Yes, that is something so and we are trying to decentralize it. We have operations in South America, in like many different countries. Of course, also in the US, we are investing in US Bitcoin mining. Again, we really believe that in the importance of the US, especially in this particular moment in time, right? So we feel like we need to be helpful and we need to contribute back. At the same time, for Bitcoin, it is important to have a strong support also from the mining side. What I believe what will happen is that when the profitability of... So when the block reward will go towards zero, what will happen is that fees on chain will skyrocket.

• 1:01:19Speaker 00

  And I believe that basically what Bitcoin will... The Bitcoin main chain will be a settlement layer for Lightning-style channels or for basically very important contracts that will, behind the scenes, will incorporate enormous amount of operations, right? If you think about now, like a Lightning channel, you have basically the two sides open basically to a Bitcoin transaction on layer one, like on the native Bitcoin chain. And after they did that initial transaction, they have a direct channel between themselves. They can send a gazillion transactions on the layer two. And then eventually they can decide to then settle back on layer one. That's when they're going to pay fees. So if you did...

• 1:02:00Speaker 00

  Of course, if every time you do a payment, you pay $500 in a fee, it's like you scream, like it's like you want to break your laptop. But if you pay $500 for a transaction, but that is actually the sum of 1 billion transactions, you might say, "Ah, I got access to the most secure network in the world." So you divide 1 billion transaction, divide it $500, it's not that much, right? So that in a certain way, I think that is the kind of one of the most beautiful dynamics. And we'll see how it will play out. But the more new layers will happen or the more new application will happen on Bitcoin, they will all happen on different layers. And so these layers will just anchor to Bitcoin.

• 1:02:44Speaker 00

  So Bitcoin will become just a security layer for Anchorage, for everything else. And as simple as that, will not be used for transactions.

• 1:02:53Ryan Sean Adams?

  Let's talk about another very traditional asset, which is not the digital gold, but the actual gold gold, which is kind of a use case that's been around for a while, but seems to be increasing. And maybe you can update us on the stats, but I was looking, there's almost $2 billion worth of tokenized gold on chain, of which I think Tether is close to 50% of that. That's been creeping up in the background. I guess gold price is appreciated, so that is a contributing factor. But it does seem like the demand is there, too. What's the story of tokenized gold, do you think? And how big could this get?

• 1:03:26Speaker 00

  I think that tokenized gold is going to be massive. In last year, we saw a huge interest, additional interest in the product. Tether, compared to the other stablecoin, gold stablecoins, has physical gold in its own controlled vaults. And so the interest of having a gold stablecoin is because you want to have a hedge against many things, including potential crash in the financial markets. And you never know if the paper gold is fully backed. You have to trust the system. And I think that not your vault, not your gold is a pretty sensible approach.

• 1:04:08Speaker 00

  So Tether, between the gold stablecoin and our own gold as Tether, we have around 80 tons of physical gold.

• 1:04:19Ryan Sean Adams?

  Wow, okay. So you both hold gold on the treasury. I think I saw estimates of that's about 50 tons of gold or so, maybe on the treasury.

• 1:04:27Speaker 00

  No, now it's 80, around 80.

• 1:04:28Ryan Sean Adams?

  Now it's 80 total, 80 total. And then there's also this tokenized gold product. For people who aren't familiar with tokenized gold and the way Tether does it, what exactly is it? Because obviously, it's a tokenized version, so it's an IOU for some gold that exists somewhere. But you're saying, in Tether's case, Tether actually owns the vault and kind of controls it? What is this product for people who aren't familiar?

• 1:04:49Speaker 00

  Most of the biggest gold bars are like around 400 ounces. They are like around 12.5 kilos. So we, basically, for every bar that we have, we generate XLT tokens, Tether Gold tokens. So for every ounce of that gold bar. So you have like 400 ounces or like 399 ounces, for example, a gold bar. We generate 399.

• 1:05:13Speaker 00

  Tokens up to six decimals, right, of precision. So for every bar, we buy the bar, we store it in the vault we control. It's in Switzerland and in basically, I think, the safest country and the safest place in the world for gold storage. And we tokenize it and we make it available. So people can actually redeem, actually that already happened. People can redeem if you have enough gold tokens for one full bar. You can come to Switzerland and you get your own gold bar.

• 1:05:47Ryan Sean Adams?

  Really? So you can redeem the actual tether tokenized gold for actual gold bars in person, physically?

• 1:05:55Speaker 00

  Yes, you have to have, of course, the full bar, like the full enough funds is worth to cover the full bar. But yes, then, yes, we are not going to sell your bar.

• 1:06:03David Hoffman?

  You don't do fractional bars?

• 1:06:05Ryan Sean Adams?

  No fractional bars, David, so. You gotta buy a full bar, it's all or nothing, man. If you want it physically, but tokenized, it could be very fractional, I assume.

• 1:06:14Speaker 00

  Yes, exactly.

• 1:06:15Ryan Sean Adams?

  That's fantastic, a very cool product.

• 1:06:17David Hoffman?

  Any other tokenized asset that comes after gold?

• 1:06:20Ryan Sean Adams?

  You going after property next, real estate or something?

• 1:06:23Speaker 00

  No, the problem with oil or silver, like think about silver would take one hundred times the space because it's one hundred times less valuable. So, you know, it's going to becoming a huge operation. I mean, if you have eighty tons of gold, it's not that big. It's really not that big, can stay in a small room. But like if you have like ten billion dollars of silver, good luck with that.

• 1:06:47Ryan Sean Adams?

  Well, what is that stat? It's all the gold in the world is an Olympic sized swimming pool, full, basically. So I mean, it's not all that much. All you need is a vault the size of an Olympic swimming pool and Tether can have all the world's gold if you guys get there.

• 1:06:59Speaker 00

  Yeah.

• 1:07:00Ryan Sean Adams?

  Well, this has been great, Paolo. I think people are really understanding the size of Tether and the scope of your ambitions and all the ways that you're involved. I want to go back to this thread that you mentioned, which is the Genius Act full circle. So you said that the Genius Act in the US could be a template for countries all around the world. I haven't actually kept up with the latest kind of crypto, stablecoin legislation in Europe, the MICA type stuff and what's going on there. Like, how's that going? And do you think Genius Act, the principles and ideas behind Genius will filter into Europe? Where do you think we go from here and the rest of the world?

• 1:07:35Speaker 00

  I wish that the, you know, I'm European and I'm allowed to say.

• 1:07:42Speaker 00

  You know, true things about Europe. And so the problem with MICA license is that it requires 60% minimum, 60% of assets in uninsured cash deposits in a bank. Means that in the US, the insurance on deposits is $250,000 and in Europe is 100,000 euros. You know, think about again Silicon Valley Bank 2023, our main competitor, had an issue because the bank went bankrupt while having uninsured cash deposits in the bank, around 3.3 billion. Imagine having 60% of uninsured cash deposits if you are a stablecoin. That is very bad. We argued before the MICA became low that you should have 100% in treasuries.

• 1:08:27Speaker 00

  So that's why the Genius Act is, gets it right. You need its much more solid requirement because, you know, it requires basically, or well, if you want, and if you are like a stablecoin, you should be able to get 100% in treasuries or 90%. But I don't want to have 40% treasuries. That would make my product weaker. And, and actually, what the MICA license says that is that you cannot have like, you need also, you need to diversify a lot in, in corporate bonds that, or sorry, in government bonds that you can buy in Europe. Like in Europe, you don't have, you cannot count on, on, on too many fingers, the, the

• 1:09:10Speaker 00

  strong countries that have good treasuries. You know, not all the countries in Europe, and well, they are all very far from being the United States and have very good treasury bonds. So what I aim and what I hope, well, more than aim, is to see like more, the Genius Act becoming the template maybe will push Europe to change the requirements because in a certain way, I think that Europe might not be a comparable regime to United States if they keep these requirements of minimum 60% in uninsured cash deposits. But everything else, everywhere else, I think they will mimic what the US is doing.

• 1:09:50Speaker 00

  Maybe they will change a little bit, someone will say 90%, someone like will say you have a slight lower composition of us, but they all will take the US genius act as a template and will make, you know, they will try to get this comparable approach.

• 1:10:08Ryan Sean Adams?

  Paolo, when it comes to the Euro though, and a Euro staple coin itself, outside of the dollar kind of backed staple coin, do you think Europe is going more in the direction of a, you know, sort of a EU central bank, digital currency, rather than the US direction, which is like, hey, we're just going to let private industry kind of roll out our staple coins? That seems to be the direction maybe they're taking, though it's hard to tell. Sometimes the EU is very, very opaque on like what's going on inside.

• 1:10:35Speaker 00

  I think that we want to do full on CBDC, which is not great in my opinion. So first of all, the EU is scared of dollar staple coins. So they want to limit the circulation as much as they can, because, you know, they feel, they fear the uptake of the US dollar against the Euro. The thing of if you, if you go outside the United States, you stop 1,000 people in the streets, you ask them, would you prefer your national currency or the dollar? Everyone will say, not even one person will say, I want my national currency. Everyone will say, I want the US dollar. Go outside Europe and ask, stop 1,000 people and ask them, would you prefer the Euro or your national currency? People don't know what is the Euro outside of Europe, and they would prefer their national currency.

• 1:11:19Speaker 00

  So no one, not even Europeans want the Euro, so imagine the others. And so, in my opinion, you know, the Europe is doing, you know, they're trying to do protectionism to their currency. Might be fair, but I am not big fan of having a central bank digital currency, because I think that what happens now with the credit cards and debit cards, there is a layer between yourself, when you spend the money, and the state. So the bank, the intermediary act as a middleman, right? So the state cannot track you or geolocate every single transaction that you do. Like you spend the digital Euro in a bar in Milan.

• 1:12:01Speaker 00

  And the the central bank would know it. That is too much, in my opinion. And we have seen sometimes that Europe is going crazy and deciding that free speech is not, you know, an option anymore and should be reduced. And all that says, like, if you control the money of people, you know, you you you might eventually use that power to seek obedience.

• 1:12:25Ryan Sean Adams?

  Paulo, this has been great. I I'm wondering if you'd just leave us with this in in summary as we close out. So, I mean, Tether has had kind of a lot of narrative ups and downs, let's say, with the US government, right? There are times when Tether's been criticized in all sorts of ways. It's also even had its ups and downs in crypto. I mean, there's been a lot of narrative FUD about, you know, Tether in the past. I I feel like this is almost 2025 is sort of a redemption, a year for for for Tether. It feels like none of that FUD is is happening these days. Even US lawmakers are recognizing, like, what Tether is, how big it is, and the value it's bringing to the US Treasury bond market. I I want you to summarize this. Why is Tether, in your words, good for the US? And why is it good for crypto?

• 1:13:07Speaker 00

  So Tether is good for for the United States because, first of all, we are bringing financial inclusion through the US dollar to hundreds of millions of people. There were charities and NGOs that raised a lot of money from everywhere else in the world and everywhere in the world to try to solve financial inclusion. A small company like Tether was able to bring financial inclusion to almost 500, half a billion people. And we are doing that with the US dollar. Second, we are spreading with that the US dollar hegemony. So when you have China, when you have all the other BRICS countries trying to undermine the US dollar hegemony, we are helping. We are actually the company that is helping the US the most out there.

• 1:13:50Speaker 00

  When you are, we are in Africa, where we are in Central South America. You don't see the presence of the United States much, but you see the presence of the BRICS countries. They're trying to undermine the US dollar. And you see the presence of Tether with millions of touchpoints. We are trying to push back, and we are pushing back. And we're making the dollar the preferred currency, the most used currency there in these countries. And third, we are the biggest, well, among the biggest purchasers of US Treasuries and US debt. And I think that When you have China that is using, that is selling, three years ago, China had $200 billion of US debt and now has less than $700 billion and could use that as a weapon against the United States. You want to decentralize the ownership of the US debt, as I said.

• 1:14:34Speaker 00

  And we are helping the United States through that. We think we're doing a good job. I think the Genius Act will help us to continue to do so in a stronger way. And we are invested in the United States. As I said, we invested a lot of the portion of our profits back in the United States, support very good companies in the United States. So I think that there is a very strong alignment between Tether and the United States. We keep our treasuries in the United States, not in a random European bank. So everything that we do ties back to the United States. So I think we are doing a good job. When it comes to crypto, it's funny because, yes, there was a lot of FUD. But if you bring back the chart, you could see that FUD is one thing, but FAX are different.

• 1:15:19Speaker 00

  So that chart is pretty much growing all the time.

• 1:15:23Ryan Sean Adams?

  There you go. Paulo, thank you so much for joining us today. This has been fantastic.

• 1:15:27Speaker 00

  Thank you very much for your time and for the opportunity. Thank you, guys.

• 1:15:30Ryan Sean Adams?

  Tether, taking the US dollar to everywhere banks in the US can't go. Got to let you know, Bankless Nation, of course. None of this has been financial advice. Crypto is risky. You could lose what you put in, but not on stable coins. We're headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.