According to Tether CEO Paolo Ardoino, Ripple’s introduction of a stablecoin might make the entire stablecoin market more credible.
During Paris Blockchain Week, Ardoino spoke only with CryptoMoon about the need for healthy competition among major players in the stablecoin market. This competition would help strengthen the reputation of fiat-backed tokens in the eyes of regulatory authorities.
“Competition is beneficial, and I’ve always felt that Tether shouldn’t stand alone in the stablecoin market. This sector is thriving due to the presence of numerous participants,” Ardoino expressed.
In more simple terms, stablecoins now play a significant role in the crypto world, with a market value exceeding $130 billion in April 2024. They offer various functions, including facilitating transactions on central exchanges and supporting decentralized finance (DeFi) applications.
Ardoino stated that the presence of numerous reputable companies successfully operating stablecoins is a testament to the increasing significance of this sector.
“Being multiplayer helps in discussions with the regulators. If you are all alone and you have one single product, regulators will never take you seriously. If you have a group of great companies, then you are more effective.”
According to Ardoino, Ripple’s planned release of a stablecoin towards the end of 2024 suggests that there’s still plenty of opportunity for other legitimate fiat-backed token providers in the market.
“I believe that there is space for everyone. Considering that the United States is printing around $1 trillion every 100 days, the space could probably be 30 times bigger than it is,” Tether’s CEO said.
Tether’s market dominance
On April 17, USDT (Tether), the front-runner among stablecoins in terms of market value, was worth approximately $108 billion. USDC (US Dollar Coin) ranked second, with a market capitalization of around $32 billion.
According to Ardono, the increasing use of stablecoins such as USDT and USDC can be attributed to the widespread inflation and weakening value of currencies in many countries.
Consider Argentina, Turkey, Venezuela, Vietnam, and Brazil in your thoughts. These countries are searching for options beyond their local currencies due to alarmingly high inflation rates. (Ardoino’s statement)
Approximately two billion people still don’t have access to banking services, earning less than $300 per month. Consequently, a significant portion of the population is excluded from traditional economic systems, limiting their transaction capabilities.
People are finding it easier and more convenient to store digital currencies such as USDT and USDC using the increasing availability of digital wallets. According to Ardoino, the ease of use of these digital currencies is a stark reminder of the complex economic situation in the world.
“USDT’s digital dollar is nothing fancy. It simply moves on a blockchain. The sad reality is that the success of stablecoins is also directly proportional to the macroeconomic issues happening in this world.”
According to Ardoino’s perspective, the circulation of USDT is backed by assets worth 106% more than the current value. Tether aims to eventually reach a 100% reserve in U.S. Treasury bills. Presently, they are reported to possess approximately $90 billion in U.S. Treasury bonds as their reserves.
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2024-04-17 11:53