CBDCs will not impact private stablecoin market, says Tether CTO

Published at: March 10, 2022

Paolo Ardoino, the chief technology officer at Tether, believes that the growing developments around central bank digital currencies (CBDCs) globally wouldn’t really impact the role of private stablecoins.

Ardoino shared his two cents in a Twitter thread on the growing discussion around CBDCs and what could be their role in the current payment system. He said CBDCs would only replace the old-age centralized payment networks as SWIFT and use private blockchains to fulfill most transactions.

He went on to explain that CBDCs are not about digitizing the fiat currency as it has already been done, given most modern-day transactions are digital. The main goal of CBDCs is to use private blockchain as a modern and cost-controlled tech infrastructure, where most of the bank transfers, credit/debit card transactions will be settled via CBDCs.

2/- CBDCs are based on the idea that #tether had 8 years ago creating the first stablecoin- CDBC will replace SWIFT etc- banks will accept transfers via CBDCs as any wire- CBDCs will settle most of credit/debit card flow, especially over the weekend

— Paolo Ardoino (@paoloardoino) March 10, 2022

Tether CTO claimed that private stablecoins such as USDT will remain relevant even in the age of government-issued digital currencies given, private stablecoins would give users the option to transfer across chains and would be available across multiple blockchains of their choice, something CBDCs won’t do.

3/- CBDCs will use private blockchain as modern and cost-controlled tech infrastructure - CBDCs won't be issued on your favourite chain, private stablecoins will continued to serve that use casePoint being: tech evolves but nothing actually changes.Only #bitcoin is our edge.

— Paolo Ardoino (@paoloardoino) March 10, 2022

Tether CTO’s response comes in the wake of growing debate around - whether CBDCs would cut the role of the private stablecoin sector. A discussion gained momentum in the United States after calls of several lawmakers to regulate the stablecoin market.

According to the Atlantic CBDC tracker, 86 countries are currently in the process of developing their sovereign digital currency, with an increase of over 100% since May 2020. Out of these 86 nations, nine countries have launched their CBDC while fifteen countries are in the pilot phase.

Among the major economies of the world, China is leading the CBDC race with a fully functional digital yuan currently being tested out across the country. Several European nations such as France and Switzerland have started cross-border trials while the U.S. is yet to finalize any plans for a digital dollar.

Tags
Blockchain
Regulation
Stablecoin
Tether
Cbdc
Related Posts
Fed Chair says stablecoins need stricter regulation, speaks on CBDC
Jerome Powell, chairman of the Federal Reserve of the United States (Fed) told the House of Representatives today that stablecoins should face stricter regulations similar to money market funds or bank deposits. Powell was asked specifically about Tether (USDT), currently the most valuable stablecoin, by Representative Anthony Gonzalez (R-OH). Tether claimed that each coin was backed by a dollar, but that has been proven false. Rather, it is backed mostly by commercial paper or debts. Powell said most of the time those assets are very liquid, but during the recent financial crisis that wasn’t the case. He explained: "The market …
Technology / July 14, 2021
Japan's financial regulators may propose legislation in 2022 restricting stablecoin issuance
According to The Nihon Keizai Shimbun (Nikkei), one of the world's largest financial newspapers and the entity behind the Nikkei 225 stock index, Japan's Financial Services Agency, or FSA, will propose legislation next year restricting stablecoin issuance to only bank and wire transfer companies. Theoretically, this would prevent entities such as Tether (USDT), which does not operate as a bank and is only regulated in the British Virgin Islands, from conducting business with Japanese customers. However, the new proposed rules would only affect some stablecoin issuers. For example, USD Coin (USDC) issuer Circle plans to become a crypto bank chartered …
Adoption / Dec. 6, 2021
Tether is gaining momentum against competing stablecoins, says Tether CTO
Paolo Ardoino, the chief technology officer of Tether and Bitfinex, is confident that Tether will preserve its status as the most used stablecoin, despite the rapid growth of competitors such as USD Coin (USDC). “If you see the volumes of Tether compared to the rest of stablecoins, they are insanely higher. They are even 10 times higher on a bad day,” he pointed out. According to a report from Arcane Research, USDC, the second-largest stablecoin, has been growing at an impressive rate over the last year and could soon overtake Tether in terms of market cap. Ardoino is not worried …
Adoption / April 15, 2022
CBDCs and stablecoins: EY advises banks to ‘prepare for what's coming’
Big Four accounting firm EY has recommended that banks should change their regulatory perimeter to address the oncoming launches of state-backed central bank digital currencies (CBDC) and private stablecoins. EY’s 2022 Global regulatory outlook highlighted the need for a policy change that can help financial services firms overcome business uncertainties amid mainstreaming of digital assets and cryptocurrency. While acknowledging the uncertainty regarding the digital assets market, the report stated: “If customers can keep their money with a central bank, they have no need for a retail bank, and firms will see their interest rate margins contract precipitously.” EY recommended banking …
Adoption / Jan. 17, 2022
CBDC activity heats up, but few projects move beyond pilot stage
Government-issued electronic currency seems to be an idea whose time has come. “More than half of the world’s central banks are now developing digital currencies or running concrete experiments on them,” reported the Bank for International Settlements, or BIS, in early May — something that would have been unthinkable only a few years ago. The BIS also found that nine out of ten central banks were exploring central bank digital currencies, or CBDCs, in some form or other, according to its survey of 81 central banks conducted last autumn but just published. Many were taken aback by the progress. “It …
Adoption / May 16, 2022