Tether CEO Shares his Prediction for 2024 | Paolo Ardoino

Crypto doesn't need a blockchain. Crypto doesn't need a token. There is no way to stop Bitcoin, full stop.

This is Paolo Ardoino, the CEO of Tether, the world's largest stablecoin operator. In this cointelegraph interview, Paolo addressed the challenges facing Tether in the competitive stablecoin market and shared his crypto outlook for 2024. I would like to address this prediction that was made by Vaneck. They say in a recent report that USDC is poised to flip USDT in 2024 as quote, more institutional adoption will reveal a preference for USDC already evident on newer L2 chains. So what do you think about this assessment?

Well, it's an interesting assessment. The way I think about it is that of course Vaneck is an institutional player and they only look at the market from the institutional point of view. For them, the market, they think that it seems to think that the market is all about institutions and the crypto is becoming mainstream in the institutional space. The reality and look, we are extremely glad as I said before, if our competitors keep growing and we don't have Tether doesn't have to be the first and the biggest stable coins forever. So in general I don't mind. What I think though is that I'm glad to see that our competition is focusing on institutional space because that was never, never the goal and the interest of terror and usdt. We are the stablecoin used by hundreds of millions of people. Our competition, while it focuses on Wall street and the same guys transposed in Europe, the classic institutions, the banks, the hedge funds. We are more than happy to leave that entire market to to our competition. We believe that crypto is about something else, is about providing help and rails to the unbanked people. And we believe that is the only reason to exist. Not the only, but is the main reason to exist of crypto and bitcoin and stablecoins is to democratize the access to financial services. So if someone has better luck if in growing their market cap with institutional investors, that's fine.

Yeah, that's interesting. So basically USDC as the stablecoin of the elites and the USDT as the stablecoin of the people. Not long ago Tether announced its Collaboration with the U.S. law enforcement agencies including the FBI and Secret Service. You have helped these law enforcement agencies retrieving some funds, freezing some accounts of entities that were on the US sanction list. So I read some critical comments about that online regarding the fact that basically these comments were saying that now, tether won't be a neutral medium of exchange, but it will be subjected to the arbitrariness of US authorities. How would you reply to people that are concerned about that aspect?

So first of all, every single stablecoin has freezing capabilities. The reason is fairly simple, right? Stablecoins, the dollar, stablecoins, euro, stablecoins, they represent an underlying fiat currency and they are using the banking rails to operate. So how would be possible to not using the banking rails, using the banking system? Because from one side people want the stability of USDT or stablecoins in general. And if you want stability, you pretend as a customer of a stablecoin that the stablecoin has safe assets like TBAs. Right? But on the other side say well, but you shouldn't have to comply with law enforcement. We use blockchains that are decentralized transport layers as a transport layer. But in the end the silver coin is centralized. So if we were not complying with law enforcement request, so first of all, you know, our job, our stability of the stable coin would not be, you know, guaranteed. Because of course if you are not complying with real world laws, then the stable coin itself could be impacted. So it's important to understand that there is a huge difference between a stable coin and a Bitcoin. If you need something that is, is untouchable, that is unstoppable, that is resistant to the wrath of God, you use Bitcoin. If you want to have access to the dollar and a dollar in your pockets and you want to use it in a better way, cheaper way, faster way, you know, more resilient way than your cash or your bank account in dollars use usdt.

Right, so you mentioned Bitcoin. So I would like now to switch the attention to Bitcoin specifically to a prediction that was made by, I believe your friend Samson Mao in a previous interview with us was very bullish. He said that in 2024 he expects Bitcoin to reach 1 million dollar price because of the combination effect of the halving and the ETF approval which is he expects to be approved early next year. So what do you think about this prediction?

Well, Samsung is a good friend and anything that will say below his number, he will call me a bear. A few years ago for Bitcoin, many of the institutional investors were calling Bitcoin a product only for criminals. And now they are jumping on the Bitcoin bandwagon. So I think we should be happy about the result, about the fact that we called them out now, we called their hypocrisy out and now they are, they're joining the, the, the bitcoin ranks or at least on the, on the face of it, they are joining the bitcoin ranks. But you know, in the end the more we go ahead, you know, the price of course matters as important, but the price is a reflection of the fact that bit there is no way to stop Bitcoin full stop.

Coming back to, to stablecoins. Stablecoins are great because they are probably the only cryptocurrency that has reached sort of mass adoption with a use case that has nothing to do with speculation. What will it take for something like that to emerge in the crypto space in 2024? Will we see something like stablecoins and other killer use case emerge? And what would that be according to you?

Well, there is a little bit of distinction to be made. People will decouple the need of a token and the need of the blockchain from the pure innovation. Right? Real world ecosystem as I like to call it is a set of tools. Could be, I don't know, a booking system, could be an Uber competitor, could be everything built on this new dogma of being decentralized and leveraging cryptography to enhance privacy and to cut intermediaries. The thing that I think is it will not survive in 2024 or will keep going down in interest is yet another token. I think we are going to not leave that moment anymore. So everyone that today comes and say well I have this new token because I have this great project. I mean I hear more and more voices telling that person stop, we don't need another token. So real world applications are in real world ecosystem are things that people need in their daily life. You are a teacher at school or you are basically a musician. What you need in your life, what is the thing you use throughout your day that could be improved through cryptography and decentralization?

You mentioned the competitor of Uber or competitor of a booking system but built on a decentralized Rails. What is the obstacle that still prevents that from. From reaching the masses?

According to you, a simple word, the word is that you are or we are referring to is greed. Someone could implement some of these tools through a blockchain, but the blockchain is the worst tool to implement some of these use cases. If you were to implement a peer to peer Uber for sure and truly peer to peer and truly decentralized, it would not have of course any point of view failures and it wouldn't need a token, right? It could be used bitcoin or USDT for payments, but it wouldn't need yet another token. So ask yourself why abc or why a person should build something that will not give yield them much money? Because if it's truly peer to peer, if it's truly decentralized, why, it means that it doesn't have any point of failure. And a token is a point of failure because think about what is happening with the sec. So if many projects that issued tokens are now in the crosshairs of the sec, because most of these tokens are actually centralized in the hands of a small group of people, making it more likely to be a security. So if you were to do something unstoppable, something perfect, it would not have a token and so it wouldn't have a blockchain because blockchains are slow, because they require global shared state.

But then that system is not related to crypto in any way, right? Because it doesn't rely on a token nor on a blockchain. Is it that correct?

But here is the point, right? So you said it's not related to crypto because it doesn't rely on a token and blockchain, but crypto means cryptography, so peer to peer. So it actually relates to crypto and the fundamental values of crypto, I.e. cryptography for privacy and for attesting the truth without the need of exposing yourself. Right. The fact that crypto, blockchain and tokens are correlated in a way is true, but also is also a lie in the sense that crypto doesn't need a blockchain, crypto doesn't need a token, BitTorrent didn't have a blockchain and was decentralized. Then do you need a token to be decentralized? No, of course not. You just need cryptography to attest who you are with zero knowledge, proof or other systems. And that's the beauty out of it.

Awesome. I think that's very interesting. Crypto is not equivalent to blockchains or tokens. So that's a very interesting take. And yeah, let's see how everything is going to play out in 2024. And yeah, let's be in touch for next year. Paulo, thanks a lot for talking to us today.

Thank you, Giovanni, for, for your time. Always a pleasure.