#1564 Paolo Ardoino | Tether Is A $2 TRILLION Company?!

Paolo Ardoino is the CEO of Tether and the CTO of Bitfinex. In this conversation we talk about stablecoins, regulation in the United States, plans for the $13 billion of profit, investments in AI, and what their plans are for the future. =======================Maple Finance is where real money meets real yield. With over $1.5B managed, Maple offers secure lending, Bitcoin yield, and premium DeFi assets like syrupUSDC. Get started today at https://www.maple.finance !=======================Xapo Bank, the world’s first fully licensed Bitcoin-enabled bank, offers military-grade security with an unmatched blend of physical and digital security, as well as pioneering regulatory oversight, so your funds are always protected. Beyond secure storage, they enable you to grow and use your Bitcoin. Earn daily interest in Bitcoin, spend with zero FX fees using a global card, and make instant payments via the Lightning Network for unrivalled access and convenience. Visit https://www.xapobank.com/pomp to join.=======================Polkadot is a scalable, secure, and decentralized blockchain technology aimed at creating Web3. Created by Gavin Wood, co-founder of Ethereum, Polkadot empowers users to build decentralized applications with ease. Backed by industry leaders, making it a preferred choice for big names, Polkadot stands out as a leading choice for investors seeking a reliable, future-proof solution in the growing world of Web3 technology. Learn more at https://polkadot.com/.=======================Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/=======================View 10k+ open startup jobs:⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

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

• 0:02Speaker 00

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• 0:30Speaker 01

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• 0:58Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode.

• 1:26Speaker 03

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:50Anthony Pompliano?

  What's going on guys? Today we have a very, very special conversation. So with Paolo Ardoino. He is the CEO of Tether and the CTO of Bitfinex. They're the most profitable company per employee in the entire world. 13.7 billion dollars in profit last year and now he's here to tell us what's going on with the stable coin, what exactly is happening with regulations? In the United States, what are they going to do with $13 billion of profit? They're investing in AI and brain-computer interfaces, and they want to see a very specific version of the future come to life. They're going to fund it and build it themselves. Paolo's always a great conversation because he is rational, and he really understands how so much of the market is developing, both in the emerging market, but also in developed markets like the United States. And this conversation gives you tons of insight into how he's thinking about it.

• 2:35Anthony Pompliano?

  And then also, he gives us an idea of what he thinks Tether's actually worth in terms of its market value. It's a big, big number that surprised me, but I think that they're probably actually undervaluing what they've built so far. So here's my latest conversation with Paolo Ardoino. Paolo, I thought a great place to start the conversation is the US Senate just passed the Genius Act. They're sending it along. Uh, this is supposed to create a federal framework for stablecoins. You run the biggest stablecoin. You're the king of the mountain right now. Uh, how do you guys look at the United States kind of leaning in on this? And what do you think the ramifications of this bill will be once it is fully passed in the United States?

• 3:10Speaker 04

  Well, um, first of all, uh, thanks, Mopple, for having me. Uh, look, I think everyone knows that, uh, US being the most powerful country in the world and the country that, um, is the biggest economic power in the world. Every other country is looking at the US in this moment. So the US passing a law for stablecoins at a federal level is truly important because that will become the template for everyone else. So we're going to see, and right now there are just few jurisdictions that are dipping their toes in, in stablecoins and crypto in general. But with this, firstly, stablecoin bill and then the market structure, that is the comprehensive crypto bill that the, um, the Congress wants to pass,

• 3:53Speaker 04

  then it will become the blueprint for, for, for the world. So that is first of all, very exciting. Second, I mean, being Tether, the company that created the first stablecoin 2014, um, 11 years in, uh, in the, in the making. And now, after 11 years, we're seeing the, the greatest country in the world, uh, passing a bill on, and our innovation. So we are very humbled and we are very excited. Um, so I think it's the right, um, way forward. And look, very honestly, I saw like some, uh, speculations, uh, going around, or it's going to be okay for Tether and, you know. Look, uh, I like this, um, stablecoin bill because, um, it's

• 4:35Speaker 04

  Forces a lot of requirements to onshore and foreign stable coins. And I think it's very egalitarian, is creating an even playing field. It pushes and raises the bar very high, also for a foreign stable coin like USDT. It has strong requirements for AML, strong requirements for compliance, stronger requirements for reciprocity and comparable regimes where, you know, foreign stable coins has to be regulated incorporated. And so that, in my opinion, is the right way to go.

• 5:15Speaker 04

  And so we are very proud, as I said multiple times, Tether is interested to meet the requirements and will meet the requirements as a foreign issuer, as well as is looking to create a grassroots domestic stable coin. We think that we are able to create two different products that will serve two very different use cases, a super highly efficient stable coin for a very, very high efficiency market like the US market, that it has the best efficiency in all the financial rails in the world, and a stable coin that is USDT, that is the stable coin for the emerging markets, developing countries, is the stable coin for the people, not for the institution, not

• 5:58Speaker 04

  for the, you know, the bankers, is the stable coin for the people. So that's what is our aim and that's what we like to see from this bill.

• 6:08Anthony Pompliano?

  It feels like there was a moment in time where there's some US players were kind of targeting you guys and some of these things that were in there, you guys could have, you know, tucked your tail between your legs and run off and say, we're not going to the US. You've been coming to the US a lot, you've been visiting the United States, you've been going to Washington, you've been going to Wall Street, you've been going to various cities, I think, meeting with a lot of people. And it sounds like really the way that you guys are going to respond to legislation is you'll continue to do USDT for the people, as you mentioned, but then you also want to create something that is here for kind of the US financial system. And I can't help but notice that like JP Morgan just announced the JPMV, which is kind of their version of a bank oriented or bank integrated alternative to stable coins.

• 6:50Anthony Pompliano?

  And so is this just a game where ultimately Tether with, you know, whatever, $13 billion in profit per year is going to go up against the big banks and we're going to see who actually can get their dollar denominated, you know, kind of digital asset adopted by the most amount of people in the US?

• 7:05Speaker 04

  Well, I think that the banks and this bank consortium or JP Morgan is no threat to our broader business model. The foreign stablecoin USDT will remain, in my opinion, undisputed winner in emerging markets. I don't see JP Morgan or any other bank from their ivory towers going and building adoption with the boots on the ground in Argentina and Turkey, in Vietnam, in Nigeria, in Kenya. We are there every single day with our team. We're breaking our backs to build kiosks in Africa and we are doing education, but Vegas in Central South America with in the number of hundreds of thousands.

• 7:50Speaker 04

  So that is completely far from the mentality of the big banks in the United States and in Europe. But also, you know, I like this analogy that, you know, I tried to use to explain the different use cases, right? So what you have in the US, you have to imagine the US as a market that has 90% perfection and efficiency of financial rails. So what the US achieved over the last 120 years is basically perfection of financial rails, almost like 90% perfection. And if you add a stablecoin to it, you get to 95%. So you gain 5% more because stablecoins are more programmable money.

• 8:32Speaker 04

  You can do few more things with stablecoins that are nice to have in the United States. And it's not really you couldn't do it before, it was just more, much more complex or less elegant to do these things without stablecoins or without blockchain technology. If you take a country like Nigeria or others, the efficiency of the financial rails is 20%. If you add a stablecoin, it becomes 50%. So instead of gaining 5% like in the United States, you would gain 30%. So these are completely two, they're super different markets.

• 9:11Speaker 04

  Yeah, our competitors thought, well, you know, Tether is going to stay in their all small niche. That by the way, our niche counts up to 30 billion users, 30 billion people that are the ones left behind by the financial system. So even calling them a niche would be extremely detrimental to half of the population of the world. But nevertheless, again, I think that what the difference between Tether, even for the US market, the difference between Tether and the big banks is that we understand what people want. Even in the US, you have people that are in, have basic income and part of the working class

• 9:49Speaker 04

  that are not, they're riches that can't afford or can, cannot be served or boarded necessarily by JP Morgan. And so that is our market, right? We understand the normal people very well, better than anyone else.

• 10:04Anthony Pompliano?

  When you think about kind of those individuals, there really seems to be two use cases for the US dollar, right? People want to pay for things, people want to hold them. We know that just changing the technology form factor, kind of the wrapper around the dollar, doesn't change the debasement rate, doesn't change the inflation rate, kind of any of those things. And so what are you guys seeing when it comes to these individuals' portfolios? Or kind of the different currencies they use? Are they using dollars to spend and then they're holding like Bitcoin for savings? Are they, are they trying to get gold? Or, you know, I know you guys have Tether Gold. Like, talk a little bit as to what the dollar is being used for? And then what are they supplementing the rest of their financial life with as a way to protect themselves from that debasement or inflation?

• 10:44Speaker 04

  Look, when it comes to USDT, 37% of the users of USDT are using USDT as a savings account. Because if you live in Turkey, if you live in Nigeria, if you live in Argentina, your national currency is devaluing at the pace that is incredible, is insane against the US dollar. So it's normal for, for the people, the most, the, well, the wide user base of USDT to use it as their savings account. Of course, the richer the country or the wealthier is the person, then it might use USDT as a checking account. Now, we believe that there is a space for, and by the way, Tether does a lot of Bitcoin education.

• 11:28Speaker 04

  For example, when we go in all the emerging markets, first we explain Bitcoin and then we talk about stable coins. Unfortunately, in the emerging markets especially, you have still people that have

• 11:41Speaker 04

  Urgencies, they have priorities in their lives, right? So they're not rich people. And again, they live in a country where the inflation is seventy percent year over year. So they have bigger problems than trying to understand what is Bitcoin. That, of course, to all of us, Bitcoin is the best currency in the world. It is the biggest creation in financial industry. But it requires a level of understanding that not necessarily is everyone is ready to undergo. And they might not have the time, but they know the dollar, right? They have been knowing the dollar for the last decades and using the dollar in the form of cash bills for the last decade, decades. And so that's what they ask first. They ask, okay, can you give me, uh, stablecoin, can you give me USDT?

• 12:26Speaker 04

  Teach me how to use USDT. And then that is the pathway to get them on Bitcoin. And when it comes to gold, also, the common denominator of emerging markets is the appreciation of gold, right? Gold has been the currency of the world for the last five dozen years. And India and a lot of countries in Africa and other many countries in Asia and Middle East have been using gold as a form of savings as well. So we are seeing recently an uptake, also given the fact that the gold price went almost two X or actually more than two X in the last two year and a half or three years. Then we're seeing an uptick in of interest of Tether Gold.

• 13:07Speaker 04

  In this moment, Tether Gold is, the interest is more for, uh, from hedge funds and professional traders that are looking at using it as their reserve or collateral, because honestly, would be a better collateral than any fiat currency, including also the dollar, right? So they're looking at at least diversifying their portfolio when it comes to their savings portfolio or their collateral portfolio with Tether Gold. But also we are seeing, um, higher uptake from the retail that are, you know, the retail has been using, buying paper gold a lot recently. And the beauty of Tether Gold is that we have physical gold in a vault owned by Tether

• 13:52Speaker 04

  and controlled by Tether. Now we hold between Tether Gold and Tether owned gold reserves, we have more than, well, around eighty tons of gold, of physical gold held in Switzerland. So, you know, it's not your vault, not your gold, like not your keys, not your coins. It's pretty much our philosophy.

• 14:10Anthony Pompliano?

  I have heard that you guys have the physical gold and there have been times where they have been counted. And to make sure that you got exactly what you need, right? And and verified and things like that, which talk a little bit about the attestations that you guys put. Recently, I was talking to someone and they were asking me all about, you know, where's the money go? And and I said, well, look, here's a website and the breakdown, I think, has gotten much better over time. It's got a lot more granularity to it. But but just maybe talk about the idea of putting it out there. And then also like how you think about allocating what those reserves actually are.

• 14:43Speaker 04

  So the reserves are predominantly in US treasuries. And then we have a bit of gold and a bit of Bitcoin. But we have strong over collateralization. So Tether USDT, the market cap is around $155 billion. We have around $125 billion in US treasuries. Plus, we have gold and Bitcoin. And we have an over collateralization just for the stablecoin of around $6 to $7 billion. So now we are, you know, running up to the end of the quarter. So we are going to do the updated calculations. But we are keeping several billion dollars more than the 100% reserves that we need to keep

• 15:28Speaker 04

  in order to fulfill all the redemptions. That's because we don't want to be like a bank. Banks do 90, up to 90% of fractional reserve. They only keep 10% in liquid assets. We want to keep more than 100% in liquid assets, among which the vast, vast, vast majority is US treasuries short term. And plus, the entire Tether group has, give or take, another $15 to $16 billion in excess. So that, you know, overall, the entire group has an equity of $176 billion in front of $155 billion as a market cap of USDT. So.

• 16:13Speaker 04

  That is very unprecedented in the financial industry. That's what makes us, I think, very different. Now, we are very proud to release a portlet attestation that is done by BDO. That is the fifth largest auditor in the world. The attestation is the industry standard, is very thorough and independently verified. So BDO does a very good job independently verifying our reserves. You're right, the gold as well is being checked, weighted, and they pass through the C scanner. So they make sure it's not tungsten. And yeah, so I think that transparency is key.

• 16:56Speaker 04

  And what I like about the Genius Act is that the requirements of transparency, either you are domestic or foreign, are very strong. So that, you know, you cannot have another Terra Luna that hides behind a finger and call itself a stablecoin.

• 17:13Anthony Pompliano?

  What do you think about the Circle IPO? You know, we've seen Circle obviously come out of the gate and explode. I saw somebody trying to break down the financials of Tether and say, "Well, if Tether was a public company, given these financials and kind of the way the market is treated, you guys basically would be worth a gazillion dollars. This would be, you know, crazy how valuable Tether would be." How do you look at that? And, you know, would you ever be tempted to take Tether public? Or just talk a little bit as to, you know, kind of you're getting updated information from the market on how they're treating the second largest stablecoin. I got to imagine that you guys are thinking, you know, internally, does that change anything that you guys are doing? Either in the financing of your company going public or maybe even how you operate?

• 17:52Speaker 04

  Well, first of all, we're very excited to see that multiplier. So I think that someone put out an analysis saying that, you know, with a conservative multiplier, Tether would be worth 500 billion dollars. And I said that is very conservative, you know, with all due respect. Because, you know, we did the same multiplier that Circle has, plus the fact that we have, Golden Bitcoin has reserves, plus the fact that we have and we own our distribution network. We don't have to pay the distribution network like the vast majority of our profits. Then Tether with the same multiplier would be worth 2 trillion dollars. So, you know, that is a nice number. Now, we are not interested to go public,

• 18:37Speaker 04

  especially given the fact that the company is very profitable and this year we think we could beat last year profits.

• 18:46Speaker 04

  Then, you know, why go in public? Because, look, there are two reasons why people, well, why companies want to go public. The first one is access to cheap capital. And in thirteen point seven billion dollars last year, and you know, I would imagine similar numbers or higher numbers this year, you know, I, it's very hard to spend all that money. You know, we have great projects and very high ambitions. But, you know, again, we are very conservative in the way we manage the company. We don't have, you know, dozens of employees. We have very highly professional selected number of employees that are great, they work very hard and they are the best in class. And also, we have lean operations.

• 19:31Speaker 04

  We have, we are reinvesting most of what we earn in safe assets like gold and bitcoin, but also we are doing, we have a very strong investment arm that is investing in new technologies like biotech, artificial intelligence and telecommunications, even land and agriculture, because we think that is the ultimate stability of the world because society will always need land and agriculture. So, we have all that. So, we don't need access to capital. And also, most importantly, I don't need, we don't need an exit. Right, we are going, we, I feel like Tether is one year old, it's not eleven years old. It's, we, I feel like we just started. We can create the greatest company in the world. We are super excited.

• 20:15Speaker 04

  Every single day, we wake up even more excited than the day before. And that's something that is a strong testament to everyone who's in the company. So, yeah, no, we are not going to be public. Actually, funny fact, I took a photo. I did a great interview, I think it was great, with the New York Stock Exchange, I think, you know, a few months ago. And then I walked out from that hall and I look at the bull. I took a selfie and basically I I posted a picture saying Tether does not need to go public because again we don't need the money and we don't plan to do an exit. And my interview was removed from from the New York Stock Exchange website. That was hilarious.

• 21:00Speaker 04

  Um, so but look, we are, we are simple people, even if, you know, we not necessarily the establishment likes us in as establishment, talking the big, strong, all the finance, the finance world, I, we don't care, right? So we, we don't want to live quarter by quarter trying to please a couple of analysts from JP Morgan. Why? I mean, we have a beautiful business and we are helping hundreds of millions of people.

• 21:25Anthony Pompliano?

  Speaking of maybe the incumbent financial system, one organization that loves you guys is Cantor Fitzgerald. Uh, you obviously have a great relationship. Um, it started with Howard Letnick and the Cantor team. Now, Brandon Letnick and his brother, um, I think, uh, you guys are very close with and it seems like Tether and Cantor have this kind of symbiotic thing where they were very helpful to you all in terms of helping to attest to the the reserves and things like that early on. Uh, but also I think as you guys have started to do more things in the United States, they seem to be helpful there. Talk a little bit about that relationship and maybe Howard, Brandon and the rest of the team.

• 22:03Speaker 04

  Well, um, Cantor is, I would say, the first institution that that took Bitcoin very seriously. We, um, we had the opportunity to meet them, um, very early on, a few years ago, when they were looking at all the different players in the industry and they found ourselves, um, and they found ourselves, uh, very interesting, but first they wanted to understand and get the answer to the biggest question around Tether that circulated. Do we have actually the money? So they did two years of very strong due diligence. They turned every single rock.

• 22:42Speaker 04

  And the more time was passing, there was like, they were like, all right, these guys must have the money because they, everything that they say is there. And, you know, that, that in the end, uh, I'll, um, ended up with, um, Howard Latnick going public in, um, early 2024 with a statement, they have the money, uh, proving and saying that, you know, money, that, that all the T bills are in the country Fitzgerald and, um, you know, like vast, vast majority of the T bills are in country Fitzgerald and the, the, you know, they are in, on US soil. That is the other thing, right? So lot of, um, there is still a lot of FAD, a lot of, um, misinformation like around Tether. We keep

• 23:27Speaker 04

  our reserves with our treasuries in the United States. If we were a company that wanted to hide, would we keep 120 plus billion dollars in the most or one of the most regulated financial institutions in the United States? That is like, you know, the, when you hear this stuff, I, I think people don't open X or don't open, you know, our website or don't, don't read since 2017 because, you know, they're clearly stuck to the old fashion of FAD because now, um, I think that everyone that, that has a bit of brain and can read and is looking around can see that, first of all, given the profitability of Tether,

• 24:10Speaker 04

  given the fact that we keep our money in the United States, we have been scrutinized by so many regulators, the New York Attorney General and so many others, we have been boarded and scrutinized by even Counter. And so that is, that was, um, you know, I, I think a strong result. Plus, I think that the Counter now is positioning itself as the leader in space when it comes to Bitcoin products. They announced like Bitcoin lending, they announced, um, um, a product that is, um, you know, a fund that is a fund that allows, um, people, companies go long Bitcoin, but with downside protection with gold. So there, there, I, I think that they are, uh, very good in, in understanding the space

• 24:54Speaker 04

  and very, very committed. And I, I'm proud to be, to have participated to their orange peeling.

• 24:59Anthony Pompliano?

  I love that they did two years of due diligence and I remember when Howard Lutten came out and said they got the money and everyone was like, wait, what? Like, that's not a Bitcoin er saying that, right? That's somebody who, if he's saying that, he either really, really believes, or he's gonna look very bad after the fact. And so I think that was a kind of a seminal moment. But also, I think that you've worked with a lot of other organizations. Most recently, the Department of Justice basically came out and said that you guys helped them. If I understand this correctly, it's like a $225 million case, but it's around pig butchering? Is that right?

• 25:33Speaker 04

  Yeah, yeah. It's crazy, right? So, you know, it's a romance scam. It's like, nice, well, nice girls could be now generated with AI. I don't know. I mean, but, you know, maybe there is a, like, there is an old dude behind them, but, you know, sending messages to guys and basically asking them for money and the guys basically sending these girls some money. And crazy thing is that they were able to get $225 million out of this. And there is a huge misconception around it. So, you know, I was talking to some journalists and they were like, oh, that means that, you know, these criminals are using USDT and,

• 26:17Speaker 04

  you know, a lot. And I was like, no, that is actually the wrong way to look at it. The right way to look at it is that pig butchering is not stealing USDT from the people. What happens is that the criminals are asking for the money. The money is being sent through credit cards and debit cards or, you know, other like payment apps to payment processors that these payment processors are from bank accounts, for what it matters. The money is first sent to payment processor, then is moved on an exchange, and then is moved maybe on a crypto exchange, and then is moved to USDT. When it gets to USDT, we freeze it.

• 27:00Speaker 04

  So for three times, two or three, for two or three times, traditional financial systems fail.

• 27:07Speaker 04

  To freeze and to recognize the scam and to freeze the money. They failed that. And when it comes to USDT, when it gets converted to USDT and goes on chain, we can recognize the patterns because for the last 11 years, we developed the best monitoring technology and then we proceed to freeze it. So all the noise about cryptocurrencies and stable coins used for criminal activity is actually, stable coins and USDT is the worst, are the worst tool for criminals because criminals will be caught and money will be frozen.

• 27:40Anthony Pompliano?

  When you think about users of USDT, one of the things to me that becomes really interesting is by having a public blockchain, you now have access to that information. You're talking about a law enforcement use case here. Are there things that you think you can do, whether it's generating analytics, whether it's measuring inflation, whether it's measuring an economy or other things that you can start to do as you get access to more and more information on chain? Like I've always been fascinated with this idea that we know that the Fed and the Bureau of Labor Statistics, like they're horrible with the data. They're looking at backwards looking information. They're trying to tell you what's going to happen in the future by telling you what happened in like February with inflation.

• 28:21Anthony Pompliano?

  But right now Stripe or Square or maybe like a Zillow or any of these sites, they have real time information. You all, maybe more so than almost anyone in the world, have real time information of payments and kind of what people are doing with money. Have you guys started to kind of explore what exactly is valuable there?

• 28:41Speaker 04

  Well, yes. So we are creating an internal dashboard to understand exactly how USDT is being used. And that dashboard is the one that allows us to understand that 37% of USDT holders are holding USDT as a savings account. We understand the time zones where USDT is being sent the most. We understand the service providers that are using most USDT.

• 29:08Speaker 04

  So that's how we could get to understanding that now we have around 450 million users and the growth of number of wallets per quarter is around 30 million new wallets. And so that is almost like Facebook level of growth. So, look, I think that data is fundamental for a business like Tether because with data we can automate a lot. We can, we are starting to implement through our QVAC AI platform. We are also thinking how we can leverage all the data that we are collecting from blockchains to try to understand our business better. In a certain way, the, you know, the fact that Tether became so popular without us having

• 29:49Speaker 04

  even a marketing team, you have sometimes to go back and look in retrospect and understand how, why did it happen and what made it great. And so that's what we are doing through this platform. We are going back in the entire history of Tether and trying to pair it every single increase or decrease of the monetary supply tied to event, geopolitical, local event and so on, and trying to link it to time zones, link it to different service providers. And so that is extremely helpful. So I think that it's going to be the foundation for our future growth. You know, we are, we are now starting to use these tools to understand how commodity traders are using U S T.

• 30:31Speaker 04

  That I believe is going to be the biggest game changer for the growth of Tether in the next few years.

• 30:36Anthony Pompliano?

  Can you explain that more? Why the commodity traders?

• 30:39Speaker 04

  So if you're a commodity trader, you do oil deals. Imagine like you want to buy some oil and trade oil. What happens is that you, you have a ship waiting to load barrels of oil in some dock and then the ship cannot start loading the barrels of oil until the wire hits the bank account of the seller. And that can take one day, three days, seven days, you know, they're, they're, this load is incredible, even for huge commodity trading firms. We're talking to the biggest, all the biggest commodity trading firms and they all report the same. And so, you know, they, they suddenly discover U S T and they think that is the best thing after sliced bread.

• 31:25Speaker 04

  Because then, for them, they all know that in all emerging markets and all, basically, most of the countries where they're used to do trades and send dollars, they can send USDT because USDT there is accepted by the population because those are exactly the countries that are using USDT as their savings account. So then, they know that the seller is incentivized to obtain USDT as a payment because it's faster and so they can, the efficiency of money for the commodity traders is higher. The seller is happier because gets the money sooner. And also, the seller knows that can also use USDT locally and to pay salaries to the population and all that because USDT is accepted as a normal currency. Look at Bolivia.

• 32:10Speaker 04

  I mean, Bolivia, I posted a tweet, like, in Bolivian shops, in Santa Cruz, people and the tags of the price tags are USDT. That happens all the time in many, many countries and many, many cities.

• 32:23Anthony Pompliano?

  When you think about how this stuff starts to play out, do you foresee a world where Tether is integrated into the stock market? Like, for example, rather than using the electronic dollars, I want to sell a stock and I literally sit in Tether or I pull withdrawal money from the stock market in Tether? Like, how deep into the traditional financial system can you push this versus do you have to build a parallel system and you say, hey, look, we got to go build a whole new stock exchange, we got to go build a whole new, you know, kind of a payment system and then we'll put Tether into that world?

• 32:58Speaker 04

  So, I think that consortium banks will try to cover the first use case that you described. And honestly, that will be basically a tokenized money market fund because, you know, traders, especially from the traditional world, they are used to such a high efficiency of money, having clearinghouses and all that, that it's always at their disposal, that they, you know, it will just improve the efficiency a little bit, as I said, from 90% to 95%.

• 33:33Speaker 04

  So what I believe that is gonna but you know focusing on that use case will not improve 90% of the rest of the population. So you know 34 billion people are living in different conditions. They are the ones that cannot access to the traditional markets. They need different tools. They need tools. They leap forward 30 years of technology and will use taxis on chain, they will use stable coins and all that. So actually it's the emerging markets that will need a parallel financial system. Still, you know, a subject

• 34:13Speaker 04

  to regulations. Again, the genius art is a great first example. But you know, this will bring new opportunities to the people that need it the most. I don't think, you know, the traders that are used to one nanosecond efficiency for trading will, you know, benefit incredibly much from a stable coin. But if you live in Nigeria and want to have access to a stock market, for example, that is a game changer.

• 34:47Anthony Pompliano?

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• 36:47Anthony Pompliano?

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• 37:31Anthony Pompliano?

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• 37:45Anthony Pompliano?

  And when you start to see kind of the profits that you guys are generating, obviously, it's a lot, 13.7 billion last year, just a couple of pennies. You are investing in all kinds of things as a diversification strategy. But they're not just things where you're going and saying, hey, let's go buy, you know, a car wash. You guys are investing in AI, you're investing in brain-computer interfaces, you're investing in humanoid stuff, you're doing, you know, computational power. I mean, like, the things you're doing are the future, regardless of who the individual winners are, like, the trends are where the world is headed. Talk about the philosophy there and maybe some of the projects that you guys are heavily involved with. Maybe about QVAC, and then I know that the brain-computer interface is maybe one of the things that you spend the most time thinking about.

• 38:29Speaker 04

  So, we are being in this lucky situation. We are carefully planning how to use our profits. And being Bitcoiners at heart, you know, we created this, this, basically, almost an equation that says that in order to have a stable society, right? A journalist asked me, you know, what, how you would define Tether? And the journalist told me that he would define Tether as the stablecoin company. And I replied, I would define it as the stable company. So, remove coin, is the stable company because the aim is helping stability of society?

• 39:15Speaker 04

  And so, we realized that for society to be stable, society needs stable money. That, you know, for emerging markets, stable money can be used, be USDT, because their existing solution is not that stable, at least compared to USDT. So, everything is relative, of course. You could say that stable money for the US could be gold or Bitcoin. But for Nigeria or for Turkey, stable money is USDT.

• 39:46Speaker 04

  Then the second thing would be, so this equation is fourfold. The second part would be freedom of speech and the freedom of communications. And so we are trying to do that with Keet and Hallpunch, creating peer-to-peer telecommunications with a great user experience that is basically equal to or superior to a normal centralized system, but completely undisruptable, completely unstoppable, completely free for everyone. Right? So that is the second layer. The third one is stable energy. So you need, for a stable society, you need to have a legalitarian access to electricity. So electricity brings to education, brings to a lot of things, of course, it's very obvious.

• 40:28Speaker 04

  So we are, even in Africa, we are trying to help with stable electricity or energy through these kiosks that we're building with solar panels on top and batteries inside. We are selling subscriptions to rechargeable batteries. We did a pilot with 500 kiosks now in small villages in Africa. And we have now, you know, 500 kiosks, around 500,000 subscribers already. And we did more than 10 million battery swaps. So that is, that is the pilot. But by 2026, we're going to have 10,000 kiosks. And by 2030, we're going to have 100,000 kiosks. So that is stable energy. It's like decentralized energy.

• 41:08Speaker 04

  So you don't have, you know, you have, you bring the energy source closer to the user. That's what we like about Bitcoin, right? And what we like about peer-to-peer telecommunications, like bringing the ownership and the control but basically closer to the person, closer to the user. The last one is stable intelligence. And so stable intelligence means, means an intelligence that is controlled and owned by the person and not by a big corporation. So my fear is, I made this analogy with the Casio calculator, right? When I was a kid, when I was in elementary school, we were forced to do all the multiplication,

• 41:49Speaker 04

  division, additions with mind, with our mind. So to train our mind and become fast and being able to be, to quickly multiply and divide and all that. Now, most of the people, they are so used to use calculators that they cannot even for a small addition, they will not do it by mind, they will do it on the calculator. And so, imagine for a simple case like calculations, how calculators, what calculators made to the ability of people to calculate in their mind. Imagine what AI could do to the human brain if basically AI will do all the thinking, or most of the thinking.

• 42:28Speaker 04

  And so, at least, the concept of not your coins, not, not, not your keys, not your coins, and not your vault, not your gold, should be applied to the intelligence. So, not, not your AI, not your intelligence is kind of our motto. So, we want to build a peer-to-peer AI platform that allows to do inference and keep the data of the users that are local to the people's devices. So, with, it can run on a $30 smartphone, can run basically everywhere. It adapts, of course, the more power, the better it will be the model that is going to be using, the more weights is going to be used from the model and all that, right?

• 43:06Speaker 04

  But that is my opinion, a way to ensure that AI will not increase the gap of access to education and access to intelligence between different populations. Already, money is a huge divider, and I think that AI could multiply that divider by 100x if we don't create something that, again, is peer-to-peer from the get-go. We cannot live in a future where only three companies will become the, will have the entire intelligence of the world. And so, that's something that Tether, fortunately, has the balance sheet to fight against and to build a different alternative system. We did it already once with money, and we're going to do it again with intelligence.

• 43:50Anthony Pompliano?

  When you think about the future of Tether, 20 years from now, 30 years from now, you're a young guy, you know, good-looking Italian, only second-best-looking one on this call here, but good-looking Italian. What is the vision for this, right? I mean, you have solved one of the problems that is very difficult for people who have high ambition and who have thoughts of the world, which is you have the capital that profit is an engine that you can use to go after some of these big ideas. Is it something where, you know, Elon's got everything from rockets to electric vehicles to bring computer interface like he's trying to build the future and you guys aspire to be much more than just a stable coin? Or is there some other future vision that you really see for the tether group that people should kind of keep in mind as

• 44:35Anthony Pompliano?

  we watch this play out over the next couple of decades?

• 44:38Speaker 04

  Well, I think that it might be counterintuitive, but my dream is to create a company that builds technology that can survive to the death of the company itself, right? We exceeded our dreams with the profitability of this company and personally and all that, right? So, you know, we even like Tether only distributed less than 5% of the profits that he made in the from inception. So all the rest is is kept in the company to invest in great opportunities, great companies, great minds to build, but with one mission to build a decentralized future that is bringing

• 45:18Speaker 04

  control and power closest closer to the person. We want, I want to build technology that not even Tether can control. I want if we build a communication app, I want people to control the communication app to have the data local to have, I want that communication app to survive even even I die or Tether dies, right? That is the beauty. I think that is the ultimate goal of what we are building is to create that same with AI, the same with everything else, right? So we want to do things that are resistant to the wrath of God, hence they should survive to whatever happens, including Tether disappearing. So only at that point, I know that we have done a very good job.

• 46:03Anthony Pompliano?

  What is your personal mission still? What is the thing that you haven't accomplished yet outside of the company? We know the company as you just described, but for you personally, like what is motivating? What is the thing that you're still driving towards?

• 46:18Speaker 04

  I mean, my, my, my dream is really linked to, to, to the company since that I, I, I think that we, I, I think that my, myself, I can build with, with our team this vision of, of

• 46:37Speaker 04

  ensuring that in the worst case scenario, the thing that I hate the most is technology is only working. We, we are so immersed in technology today and that technology only works in the best case scenario. I mean, in these last days, you have, you might have heard about this little thing as the World War III that was airing around. And I can guarantee you that in that case, if that truly happens, most of the technology that we, we have in our pockets will stop working. Because internet lines will be cut and so technology should be more local, should be able to work in the worst case scenario. Should be able to work with latency that is one day or one week.

• 47:20Speaker 04

  Most of the applications don't work if latency is higher than one second. And there are timeouts for technology that is every single SDK or library for coding has a timeout of 30 seconds. So if you cannot get a connection for 30 seconds, everything starts to fail. How crazy is that? But if we are living in a disaster scenario, we need to be able to have technology that works locally first. That's my mission is actually to prove that you can build great technology that is human first, is person first, is peer first, and can survive to the worst case scenarios. But even if we are going to a multi-planetary life,

• 48:04Speaker 04

  what is the latency between here and the moon? What is the latency between here and Mars? So we need to be able to have that type of technology. And that's what we are building with hole punch, with our AI platform, with everything else. It is a, a future where it doesn't matter if you are close or far, everything will keep working the, and you are going to be protected by, by, by your technology. Be open, even with a brain-computer interface company. We want to build an open-source brain operating system so that people will have full control over their own lives. That is my life mission. Um, you know, it's all started for me when I've been a coder all my life. I started when I was eight. And I know I've been a sci-fi fan that is driving all most of my thoughts.

• 48:49Speaker 04

  I always think about like sci-fi and event, sci-fi eventually will come true. Uh, and so, so it means that she eventually will hit the fan and I want to be able to build for that scenario. And I did, I was researching this group that was, um, building a telecommunications network for, for disaster scenarios, like from the apocalyptic scenario or a battlefield. And if you are like a person in a battlefield, you know, uh, you have, you need this communication network that will work and will, it needs to save your life. Right? You need to talk, talk to your friends. Needs to be able to get you out from a very dangerous situation. And so I started thinking about technology in that sense.

• 49:32Speaker 04

  So you need technology that will save your life when your life, when you are the most scared, when your life is in danger. Because that could happen to everyone. And, and so that is basically how I try to think about everything that I build in, in, in, um, in Tether.

• 49:49Anthony Pompliano?

  I could talk to you all day, man. I, uh, I'm obviously very impressed with, uh, what you guys are doing with Tether, but I think that the broader vision, kind of the vision for humanity and this intersection with technology is, is inspiring. Um, and, uh, you know, I'm glad that you guys have the capital uh, available to you to go and see if, uh, if you can help usher that world in. There's not very many people who I think understand some of these problems, but also have the, the courage and ambition to go after them. So, uh, from everyone else, thank you very much and we'll definitely do this again in the future.

• 50:19Speaker 04

  Thank you for having me. Great talking to you.