Tether director comments on LUNA collapse and support for USDT stablecoin

THE CTO of Tether and BitFinex exchange† Paolo Ardoinocommented on in an exclusive interview with the live coins about the collapse of LUNA and the support of its USDT currency, which is constantly suspected by the world community.

In addition, the executive spoke about his understanding of the importance of stablecoins in emerging and weak currencies.

In terms of market capitalization, USDT is the largest stablecoin in the world, in addition to being one of the most widely used by traders on trading platforms. Data from the Brazilian crypto market in the last 24 hours shows that it has the second highest trading volume, behind only Bitcoin in the country.

1- When we talk about stablecoins, many people are skeptical about it. What do you see as the benefits of this technology for the market and the world?

As the name suggests, stablecoins are cryptocurrencies with a stable price. They usually achieve price stability by being backed by reserves, usually a fiat currency such as the US dollar or a commodity.

Tether first introduced this concept of stablecoins in 2014 with a simple idea: to use blockchain, the same technology that powers Bitcoin, to move coins in a transparent, efficient and decentralized way.

Stablecoins have become a viable medium of exchange for e-commerce and have proven to be a resource for businesses looking for a cheaper and more efficient way to make payments between buyers and sellers. They have also become useful tools for migrant workers who send remittances across international borders.

Tether’s main competitive advantage is that it targets people who have difficulty accessing financial services. In fact, it is seen as an instrument of freedom. Tether also differentiates itself from the competition by having a strong, conservative and liquid portfolio that aims to preserve its reserves.

2- Stablecoins are private cryptocurrencies issued by companies and backed by certain assets. For investors to better understand, is there safety in its issuance?

I can speak for Tether, people choose Tether because it is the largest, most innovative and most liquid stablecoin. Tether has never declined a user’s transaction in its history. It is practical which is why Tether tokens have become more and more popular as the cryptocurrency industry continues to grow.

Tether has also become the first among its peers to bring great transparency to the stablecoin market by releasing its regular backup compositions and security certificates to the general public.

In addition, the value of Tether’s reserves is published daily and updated once a day, and even in its darkest days, the stablecoin has never rejected a ransom. The latest information can be found here: https://tether.to/en/transparency.

3- Many people accuse Tether of having no ballast, what would you say about this?

Tether continues to process redemptions as normal amid some expected market panic. Despite this, Tether has and will not refuse redemptions to any of its verified customers, which has always been its practice. In the past 24 hours alone, Tether has honored more than USD 300 million in redemptions and has processed an additional USD 1 billion without issuance to date.

On Bitfinex, the Tether pin is >1$, while on Kraken it is just under 1$. This led arbitrageurs to buy USD₮ cheaply on Kraken and sell it on Bitfinex for a profit. While other market makers bought USD₮ <1$ on Kraken and immediately exchanged it for 1$, still enjoying the profits.

Tether is always prepared for sudden market demand requests in terms of redemptions or issues. Tether works in constant risk management and stress testing scenarios, so it always has a liquid portfolio of assets on hand to manage redemptions, even in a banking scenario.

Since May 11, Tether has successfully processed $10 billion in USD₮ redemptions to verified individuals. All redemption requests submitted have been redeemed in full. The USD₮ parity was respected in a 1 to 1 ratio with the USD. The magnitude of this impeccably managed bailout shows that USD₮ is by far the most resilient and solid stablecoin in the industry.

The value of Tether reserves is released daily. Visit https://tether.to/en/transparency for the most current information.

4- Using Tether, mainly USD₮, has been great, especially in emerging countries that don’t have strong currencies. Argentina is an example of this growth. Do you believe stablecoins can replace fiat currencies?

Tether itself is a tool for the unbanked, a tool for an evolving payment system, and a leader in driving widespread adoption of a new financial revolution.

Tether expects stablecoin growth to continue this year and next. As companies like Airbnb and PayPal explore how to integrate cryptocurrency payments into their existing platforms, the public can see that stablecoins play a role in these tech stacks, whether it’s using existing stablecoins or creating new ones.

In recent years, the company has seen stablecoins being used to enter and exit trading markets, but they have a utility that goes way beyond the cryptocurrency ecosystem. Payments could be the next frontier for growth. On the company side, Tether is pleased that the market continues to show its confidence in Tether: the first, largest and most transparent, innovative and liquid stablecoin.

5- We recently had a vague case regarding the TerraUSD stablecoin. What does Tether say about this case and how are these kinds of problems avoided with USD₮, for example?

Terra UST is an algorithmic stablecoin that maintains its stability by creating and destroying UST’s offerings through an exchange with LUNA, the original token of the Terra blockchain. Algorithmic stablecoins such as Terra also often attempt to secure high-volatility assets without entering the details of their composition.

Unlike these algorithmic stablecoins, Tether has a strong, conservative and liquid portfolio made up of cash and cash equivalents, such as short-term government bonds, money market funds and commercial paper from issuers rated A-2 and above.

“We don’t believe the UST situation means anything for the centralized stablecoin market.”

They are completely different types of assets. Centralized stablecoins make the crypto economy much more efficient by putting dollars on a blockchain and are used to disrupt everything from the digital payment space to e-commerce purchases and even facilitate transactions in decentralized financial ecosystems.

6- Are there any plans for Tether and Bitfinex for Brazil in the coming months/years? What other Latin American countries are in the crosshairs of the organization?

We look forward to working with Brazil and other countries around the world to expand our vision and deliver the same opportunities now enjoyed in El Salvador. For example, Tether is the most traded currency in Turkey and is very successful in Argentina and Venezuela.

We are in talks with other locations that are definitely interested in going the Plan B path of Lugano (Switzerland).

7- Are there talks with a government to implement USD₮ as legal tender, as was the case with Bitcoin in El Salvador? We know the company has a crush on that land, if you can also say something about the relationship with Nayib Bukele.

We are ready to work with all governments around the world to continue on this path as it marks a major turning point in global finances.

Since 2021, many influential people and companies in the crypto ecosystem have praised the heroic fight for financial freedom that President Nayib Bukele, his government and the public have started by investing in Bitcoin with the goal of a fairer, more secure, transparent and sustainable monetary system. for the future of the country.

We support the people of El Salvador, so we set up a fund to help families affected by gang violence. Donated funds were provided jointly with the government and civil society organizations and were subject to strict controls to ensure fair distribution.

8 – As an entrepreneur in the cryptocurrency sector, Paolo has been in the market for years, how do you see the current market demand?

We see USD success in peer-to-peer (P2P) trading markets. We are seeing more and more people start to accept tethers as a form of payment for services, goods and more. The main comment we have is that it offers a faster resolution than the dollar which is a faster exchange mechanism and people prefer it over the local currency mostly because it offers more protection against devaluation.

I think we are on the cusp of a technology revolution with Bitcoin at the forefront. Critics and opponents alike should take note of this turning point as people realize the many possibilities for a future form of money. In recent years, we have witnessed a major shift in the adoption – and usefulness – of Bitcoin in Latin America.

This has contributed to economic growth in the region and has been a beacon of hope for financial freedom. Intuitively, people see Bitcoin use cases. Whether for protection against inflation or for money transfers, we are seeing a reversal in the adoption of cryptocurrencies in the region in countries as diverse as Argentina, Ecuador, El Salvador and Brazil.†

9- And about regulation, how did the company see the draft laws in countries? And push the regulation of stablecoin, is it good or bad for USD₮?

There will always be a market for stablecoins as they give traders the opportunity to interact with the larger crypto ecosystem. Tether itself is a tool for the unbanked, a tool for an evolving payment system, and a leader in driving widespread adoption of a new financial revolution.

Tether expects stablecoin growth to continue this year and next. As companies like Airbnb and PayPal explore how to integrate cryptocurrency payments into their existing platforms, the public can see that stablecoins play a role in these tech stacks, whether it’s using existing stablecoins or creating new ones.

In recent years, the company has seen stablecoins being used to enter and exit trading markets, but they have a utility that goes way beyond the cryptocurrency ecosystem. Payments could be the next frontier for growth. On the company side, Tether is pleased that the market continues to show its confidence in Tether: the first, largest and most transparent, innovative and liquid stablecoin.

10- Leave a comment for those who want to learn more about cryptocurrencies, a tip on how to do business in the sector and what would you say to those just getting started with this technology?

Tether does not provide financial advice. However, we believe that individuals should do their own research before investing or seeking professional advice.