Tether CEO: Uncovering the secrets of the success of the world's first stablecoin USDT

At the Bitcoin 2025 Conference, Paolo Ardoino, CEO of Tether, which issued the world's first stablecoin USDT, delivered a speech. We can gain his understanding and exploration of stablecoins from his speech, and of course it may also trigger our deeper thinking.

Tether launched the world's first stablecoin USDT in 2014. Since then, stablecoins have gradually become a bridge connecting traditional finance and digital finance in the crypto world. From Paolo Ardoino's speech, we can see why USDT is successful? Because it has long been not only a medium of exchange, but also a financial instrument that can meet a variety of needs, playing an important role in different scenarios, especially in the "disintermediation" life, it has become a core tool to help individuals get rid of the shackles of traditional financial and technology intermediaries. It itself is a successful financial technology product in a special era.

1. Efficient and inclusive trading and payment infrastructure

In the cryptocurrency market, price fluctuations are often more drastic, which brings certain risks and inconveniences to transactions. After the emergence of USDT, with its stability pegged to the US dollar,it has become an important medium in cryptocurrency transactions

Specifically, before the emergence of USDT, if investors wanted to convert between different cryptocurrencies, they usually had to convert one cryptocurrency into legal currency first, and then use the converted legal currency to buy another cryptocurrency. This process is not only cumbersome, but may also increase transaction costs due to restrictions on fiat currency exchange and handling fees. The emergence of USDT has changed this situation. Investors can use USDT as an intermediary to conduct convenient transactions between different cryptocurrencies. For example, if an investor wants to exchange Bitcoin for Ethereum, he only needs to exchange Bitcoin for USDT first, and then use USDT to buy Ethereum, which greatly simplifies the transaction process.

From the data, USDT occupies an important position in cryptocurrency transactions. The data provided by Paolo Ardoin shows that USDT accounts for 62% of decentralized transaction volume, which fully demonstrates its wide application as a transaction medium. It is precisely because of the stability and convenience of USDT that it has become the preferred medium for many cryptocurrency traders and has helped the prosperity and development of the cryptocurrency market.

In addition to being used for encrypted payments, USDT also plays a role in traditional payments. In some areas, due to the imperfect financial infrastructure, traditional payment methods have many inconveniences, and the digital characteristics of USDT make it possible to make convenient payments on the Internet to meet people's daily consumption needs - this essentially bypasses the restrictions of traditional banks and other financial intermediaries, allowing individuals to directly control the flow of funds.

Second, global "digital dollar" savings and value anchors

Paolo Ardoino believes that the outbreak has become an important turning point in the expansion of USDT application scenarios. Before the outbreak, USDT was mainly used as a medium for cryptocurrency transactions, and after the outbreak,it quickly transformed into a "digital dollar" used by hundreds of millions of people around the world and integrated into people's daily lives. As a "digital dollar", USDT not only provides people with a way to save, but also plays a role in payments in daily life.

In some emerging markets and developing countries, the local currency is depreciating at an alarming rate, and people's wealth is facing a serious risk of shrinking. Take Turkey, Argentina, Vietnam and other countries as examples. The currencies of these countries have depreciated severely over a period of time. In order to protect their wealth, residents need to find a relatively stable way to save. Although the US dollar is a widely recognized currency internationally and has relative stability, for various reasons, it is difficult for people to directly hold US dollar cash or open a US dollar account in a bank. At this time, USDT, as a stable currency pegged to the US dollar, has become their most realistic choice. About 35% of USDT users use it as a savings account, and by holding USDT, they can resist the risks brought by the depreciation of the local currency and protect their wealth value.

For ordinary investors, USDT can also be used as part of asset allocation. Adding a certain proportion of USDT to the investment portfolio can stabilize the value of the investment portfolio when the market fluctuates greatly, and also provide investors with a certain amount of liquidity, so that they can make other investments at the right time.

3. Tools for "de-intermediating" life

Tether has further developed multiple functions based on USDT, trying to make it a tool for "de-intermediating" life. In essence, it forms a corresponding ecosystem based on the basic functions of USDT.

Reshape financial education and entrepreneurial ecology. Tether cooperates with universities around the world through educational programs to popularize Bitcoin and stablecoin education. Its core goal is to break the intermediary barriers to the dissemination of traditional financial knowledge. In the past, financial education was monopolized by colleges and training institutions, while Tether uses open source courses and practical cases to allow more people to master the logic of digital assets independently. At the same time, Tether invested in the BTC Pay Server open source project to promote Bitcoin payment infrastructure, helping merchants to skip intermediaries such as payment gateways and directly accept cryptocurrency payments; it teamed up with Fulgur to create a venture capital fund to invest in Bitcoin startups, supporting the incubation of "de-intermediation" financial projects from the bottom up, so that entrepreneurs can obtain funding and technical support without relying on traditional venture capital institutions.

Brand de-intermediation practice. Tether's AI platform KUBA advocates that AI Agents have their own Bitcoin wallets. In the future, your AI assistant may use stablecoins to pay API service fees, or even earn revenue through micro-transactions - no longer dependent on the closed ecosystem of technology giants. For example, Tether cooperated with the city of Lugano in Switzerland to hold the Plan B Summit and sponsored the local football club, bringing the Bitcoin and USDT brands to the European stadium. This is not only a marketing behavior, but also the entity penetration of the concept of "disintermediation" - traditional brand promotion relies on intermediaries such as advertising companies and media platforms, while Tether shortens the connection path between brands and users by directly cooperating with cities and sports IPs.

Fourth, successful but regulated financial technology products

From the perspective of market penetration, functional value, commercial returns and other indicators, stablecoins are undoubtedly one of the most successful innovations in the field of financial technology. With explosive growth in scale, Tether's USDT total market value will reach $153 billion by 2024 (equivalent to 1.5 times the market value of Goldman Sachs Group); the average daily trading volume will exceed $70 billion (three times the trading volume of Apple stocks); it will cover 420 million users, equivalent to 76% of global cryptocurrency users; the profitability will be disruptive, and Tether will achieve a net profit of $13 billion in 2023, exceeding Morgan Stanley (10.7 billion) and UBS (9.2 billion). Tether holds more than $120 billion in U.S. Treasury bonds, as well as more than 100,000 bitcoins and about 50 tons of gold.

But some people point out that USDT has become a systemic risk amplifier. The collapse of Silicon Valley Bank in 2023 caused USDT to temporarily depeg to $0.92. USDT holds more than 100,000 bitcoins. If BTC plummets by 30%, it will trigger a collateral value crisis. In theory, all users can redeem at the same time, but the realization of Treasury bonds requires T+2 delivery. USDT has also objectively become a geopolitical tool. The North Korean hacker group Lazarus used a mixer to clean up USDT stolen money, and Iran used USDT to circumvent oil trade sanctions. According to Chainalysis data, the proportion of stablecoins in illegal transactions rose to 82% in 2023.

It can be said that USDT is a paradox that succeeds in the absence of traditional finance and prospers in a regulatory vacuum. Its success essentially comes from the failure of sovereign currency governance (the collapse of fiat currencies in inflationary countries) and the failure of financial intermediary efficiency (exploitative pricing of cross-border payments). As Tether CEO said: "We are not a money printing machine, but a provider of disintermediation infrastructure." The commercial miracle of stablecoins stems from the fact that it accurately pierces the Achilles heel of the modern financial system-but its vulnerability also comes from the regulatory environment where this wound has not yet healed.

Where will stablecoins go in the future? Wang Yongli, former vice president of the Bank of China, believes that "considering that stablecoins (actually tokens of pegged currencies) that are equivalent to sovereign currencies have been launched and run for 10 years and are becoming more and more perfect and stable, one possible path may be to use the technical system of stablecoins to transform sovereign currencies so that sovereign digital currencies can be launched as soon as possible and replace stablecoins (no longer need special tokens)", that is, he believes that sovereign digital currencies must be able to replace stablecoins, which may imply that stablecoins are likely to be a transitional tool. ("Wang Yongli | Bitcoin, stablecoins and central bank digital currencies should not be compared") So what are the characteristics of stablecoins that are not currently possessed by sovereign digital currencies? We believe that it is not enough to only focus on the advantages of stablecoins in payment and settlement. Compared with traditional finance, stablecoins have two other outstanding advantages that deserve attention, namely programmability and smart contracts and improving the transparency of operating mechanisms. (Zhang Feng, "Wang Yongli keeps a close eye on stablecoins, but only seeing their payment and settlement efficiency is not enough") Perhaps only by solving these problems can sovereign currencies truly have the functions of today's stablecoins.

In the development of stablecoins, we must of course pay attention to the regulatory and security issues they face to ensure their healthy and stable development. But we believe that with the continuous advancement of technology and the continuous development of the market, the "disintermediation" application scenarios of stablecoins will continue to expand and deepen. In the future, stablecoins that are constantly incorporated into the compliance framework will play a more important role in the global financial system, bringing more convenience and opportunities to people's lives and economic activities. (Picture from the Internet)