Tether CEO Paolo Ardoino Tells Bloomberg That the Company Is “Open To” Creating a Separate Domestic Stablecoin

Tether CEO Paolo Ardoino told Bloomberg on Friday that the company is “open to” creating a separate domestic stablecoin to meet the needs of the U.S. market.

The CEO of Tether, Paolo Ardoino, has revealed that the company is "open to" creating a separate domestic stablecoin to serve the needs of the U.S. market.

The news comes as the U.S. Congress continues to push through legislation for stablecoins. Notably, the Senate is set to vote on the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act), which aims to regulate stablecoins.

In an interview with Bloomberg on Friday, Ardoino mentioned that Tether is "getting comfortable" with the GENIUS Act and will be compliant. However, the main market for USDT will continue to be emerging economies, as these are the markets that "need us the most."

"We believe in the importance of USDT as the most used digital dollar in all the emerging economies," Ardoino added.

Regarding Tether's plans for a U.S. domestically issued stablecoin, Ardoino stated that the company's plans are "closer to the second half" in terms of football games.

Why Teater thinks the U.S. needs a separate stablecoin

According to the World Bank's estimations, approximately 1.4 billion adults remain unbanked, with a significant concentration in emerging economies, particularly Sub-Saharan Africa and parts of Asia.

Catering to the needs of this unbanked population, who lack access to traditional financial systems, is a primary mission of Tether, as highlighted by Ardoino.

Stablecoin users in emerging markets typically employ USDT for foreign remittances and to safeguard the value of their savings amid local currency depreciations.

Ardoino disclosed that 37% of USDT's user base utilizes the stablecoin for savings, and Tether boasts over 420 million users across developing countries.

“They need something that is stable in their lives, and that is the U.S. dollar in digital form, that is USDT,” Ardoino said.

However, the U.S. requires a stablecoin to serve purposes distinct from those of users in emerging markets.

Tether has been advocating that "stablecoins are surely important also in the United States," but with a diverse array of payment methods available in the country, USDT is better suited to meet the needs of the unbanked population, as explained by Ardoino.

"In the U.S., you wouldn’t use stablecoins for payments to improve the efficiency of our money," Ardoino stated.

This disparity in use cases and the optimal regulatory framework for each market led Teater to apply for a U.S. national trust bank charter earlier this year.

The company is planning to launch a domestically issued stablecoin that will be "competitive" in the U.S. economy, which is why the domestic stablecoin will have a "different feature set" than USDT, Ardoino added.

Teater interested in seeing GENIUS Act passed

In the interview with Bloomberg, Ardoino also touched upon Teater's interest in the U.S. government's regulation of stablecoins.

"We are very interested in seeing how the U.S. government will be regulating stablecoins, especially with the new legislation that is being put forth by the government, which we believe is useful and necessary," Ardoino said.

Ardoino stated that Teater plans to ensure that USDT complies with the GENIUS Act, which he claimed is better than Europe's MiCA regulation.

Teater's issue with MiCA is that it requires U.S. dollar-based stablecoins to hold 60% of their reserves as cash deposits in European banks, which is a "bad idea," Ardoino said.

The GENIUS Act, on the other hand, requires stablecoin issuers to hold 100% of their reserves in cash equivalents, preferably U.S. treasuries, which Ardoino called a "great idea."

"We will be compliant, and we are getting comfortable with the new legislation, especially the part about the foreign issuers and the domestic issuers," Ardoino added.

Adroino does not foresee complications in complying with the GENIUS Act, whether as a foreign or domestic stablecoin issuer. However, he added that he wants to see the GENIUS Act passed because:

"...in general, we think that it’s important for the domestic one [U.S. stablecoin of Teater] to have regulatory clarity before moving forward."

On May 19, the U.S. Senate voted to invoke cloture on the motion to proceed to the GENIUS Act. On May 21, the Senate voted on a motion to proceed, moving the GENIUS Act closure to the vote on final passage. The final floor vote is expected to take place after Congress’s Memorial Day recess.