DUBAI, April 19 (Reuters) – Stablecoin Tether’s recent growth is driven not by demand for crypto trading, but by its use as a substitute for the U.S. dollar in emerging markets, says Tether. CEO Paolo Ardoino told Reuters on Friday.
Tether issues a stablecoin, also known as Tether or USDT. It is designed to maintain a constant value of $1 and is widely used for trading between cryptocurrencies. It has grown rapidly in recent years, with more than $100 billion of Tether tokens in circulation in March. ” Over the past few years, we have seen the use of USDT change from pure crypto trading to essentially the most used digital dollar in the world. The world,” Ardoino said on the sidelines of the Token2049 cryptocurrency conference in Dubai. Industry enthusiasts gathered despite this week’s heavy rains disrupting life in the desert city.
“Almost the entire user base is in emerging markets,” he said, citing Turkey, Vietnam, Brazil, Argentina and “African countries” that sometimes run out of dollars.
“It’s true that Argentina has grown rapidly in the last year,” he added.
Ardoino said Tether has just over 300 million users worldwide.
“We want to be the last mile dollar for the unbanked,” he said.
Regulators have long warned of market risks from the introduction of crypto assets. The Bank for International Settlements said in a paper last year that cryptoassets, contrary to their “illusory appeal as simple and quick solutions to financial problems,” amplify financial risks for developing countries. .
In Argentina, crypto exchanges can play a role in the currency market, with locals and foreign traders alike using the crypto exchange’s Tether Peso pair as a proxy for the USD to Peso exchange rate.
The cryptocurrency market has largely recovered from the crash that caused prices to plummet in 2022. Bitcoin, the world’s most valuable virtual currency, hit an all-time high of $73,803.25 in March on excitement over inflows into the U.S. spot Bitcoin exchange-traded fund (ETF). , which also supported Tether’s growth, Ardoino said.
Ardoino, who took over as CEO in December while retaining an interim role as chief technology officer, said the company has expanded its workforce from about 100 to about 100 today as it expands into new areas such as AI. He said there would be 150 people.
U.S. regulators have warned banks that stablecoin reserves could be rapidly drained, for example, if holders rush to convert them into traditional currencies. There is.
Tether, the third-largest cryptocurrency, says it maintains a dollar peg by holding dollar-based reserves commensurate with the amount of crypto it creates.
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Additional reporting by Elizabeth Howcroft in London. Edited by Tommy Reggioli-Wilkes and Mark Potter
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