Exclusive Interview with Tether CEO: The Impact of the "Genius Act" and Circle IPO on the Stablecoin Industry

Tether CEO Paolo Ardoino, as a leading figure in the stablecoin industry, has ambitious plans for Tether's continued development and market position. In the context of the upcoming passage of the U.S. "Genius Stablecoin Act," Paolo shared his insights on the next phase of development in the stablecoin industry.

1. About the Genius stablecoin bill

The passage of the Genius Act is undoubtedly a major benefit for onshore stablecoin issuers like Circle, but what does it mean for offshore issuers like Tether?

Paolo stated that Tether, as a pioneer in the industry, feels very encouraged to see the U.S. government beginning to pay attention to and regulate stablecoin technology. The Genius Act is an important step in the right direction, building a robust regulatory framework for onshore and offshore stablecoins in the U.S.

Paolo believes that Tether is in a favorable position regarding compliance. The company has been actively cooperating with law enforcement agencies around the world and has established partnerships with over 250 law enforcement agencies in more than 55 countries. At the same time, the monitoring technology developed by Tether itself can effectively identify secondary market activities within the blockchain ecosystem.

Paolo is confident about the specific requirements in the bill. He pointed out that Tether made a profit of $13.7 billion last year and is expected to exceed that this year. The $155 billion in assets held can generate about $7.5 billion in income for Tether at current interest rates. In addition, Tether has also invested in gold and bitcoin.

In terms of asset reserves, Paolo revealed that Tether is the fifth largest buyer of U.S. Treasury bonds and ranks 18th among non-state entities. The company holds over $120 billion in U.S. Treasury bonds at the top U.S. financial institution "Counterfeit Gerald." This transparent method of fund storage aligns with the spirit of the Genius Act.

Paolo emphasized that Tether's fund storage and operational model can ensure the company's stable operation even under significant redemption pressure. He believes that the current government and the Genius Act will provide a clearer and safer environment for the entire industry.

2. Stablecoin Business Model

Although Circle's IPO has generated a lot of excitement, many large companies are also preparing to issue stablecoins, but Paolo believes that stablecoins have distinctly different application scenarios in the United States and other parts of the world.

He pointed out that the United States is one of the markets with the highest efficiency of capital flow in the world, with a financial channel efficiency reaching 90%. Introducing stablecoins could potentially increase the efficiency to 95%, but the premium space is limited. In contrast, introducing stablecoins in other regions can improve financial efficiency by 30%-40%, which is more significant.

Paolo emphasized that there are still 3 billion people worldwide without bank accounts, while Tether has covered 450 million users, which represents a huge opportunity. Therefore, it is crucial to differentiate products and application scenarios for different markets.

Tether's competitive advantage lies in its unique distribution network. Paolo stated that Tether does not work directly with major banks like its competitors, but instead focuses on grassroots education and promotion. This bottom-up approach has always been Tether's strategy.

3. How to Win the Next Phase of Stablecoins

With the advancement of the Genius Act, the stablecoin industry is about to enter a new stage. Paolo believes that distribution channels will become key.

Tether has invested in over 100 companies, establishing an extensive distribution network. Paolo detailed the company's innovative projects in Africa, such as building solar information kiosks to address local power shortages. These initiatives not only provide infrastructure but also promote the use of USDT.

Paolo revealed that over 60% of the growth in Tether's market value comes from grassroots usage in emerging markets. He expects that commodity trading could be the next driving force behind the growth of USDT's market value.

In the geopolitical landscape, Paolo believes that Tether is driving a triple transformation:

1. More effective in financial inclusivity than many international organizations.
2. Expand the global use of the US dollar, promote US dollar hegemony
3. Building energy and financial infrastructure in Africa

Paolo emphasized that what users really care about is low fees. Tether is developing a simple wallet centered around savings, aimed at meeting the basic needs of users in emerging markets.

4. Tether Ventures Investment Logic

Paolo introduced Tether Ventures' diversified investment strategy, covering traditional assets, emerging technologies, and global market promotion opportunities.

Investment layout includes:

• Traditional assets: Bitcoin, gold, land, agricultural companies
• New technologies: artificial intelligence, brain-computer interfaces, AI infrastructure
• Global Promotion: Football Clubs, Digital Distribution Networks

Paolo emphasized that distribution is a key factor in evaluating investments. He envisioned scenarios where future AI agents may require non-custodial wallets, and Tether is developing an open-source wallet development toolkit (WDK).

5. About Blockchain, Wallets, and Bitcoin

Paolo does not believe there will be a "Tether chain" in the future, but is optimistic about the development prospects of certain blockchain projects. Tether plans to launch a wallet that supports all networks, allowing users to choose the chain that suits them best.

Regarding Bitcoin, Paolo expressed a special fondness. He believes that Bitcoin's design allows it to function properly even in extreme circumstances, possessing ultimate inclusivity. Paolo envisions the Bitcoin main chain becoming the settlement layer for layer two networks, becoming the "security layer that anchors everything."

6. Benefits of Tether to the United States and Cryptocurrency

Paolo summarized the four major benefits of Tether for the United States:

1. Promote financial inclusion through the US dollar
2. Promote the use of the US dollar in emerging markets
3. Become an important buyer of U.S. Treasury bonds
4. Reinvest the profits in the United States

For the cryptocurrency industry, Paolo believes that Tether's stability and transparency provide a solid foundation for the market and drive the development of the entire industry.