Crypto curious? It turns out so-called stable coins are increasingly the “way forward” with retail consumers inspecting the equivalent of the digital dollar. But not all stable coins are equal. Or at least that’s the thinking of industry insider and technical CTO, Paolo Ardoino, who will join Grit Daily and BlockTelegraph at Paris Blockchain Week.
Grit Daily: Inquiring minds asked us – what is behind the “Tether name?”
Paolo Ardoino: Stablecoins work differently in comparison to other cryptocurrencies such as Bitcoin because their price does not fluctuate according to market forces, their value is tied to a fixed currency. Tether is tied (tethered) to the US dollar, hence the name Tether.
Grit Daily: What is the difference between a ‘stable coin’ and a ‘CBDC’ for the startup pedestrians out there?
Paolo Ardoino: The key difference between stablecoins and CBDCs are the ways in which their monetary systems operate. The very nature of decentralized finance is a peer-to-peer ecosystem that doesn’t rely on intermediaries to facilitate liquidity or transactions. With stablecoins, users are able to facilitate transactions within decentralized finance. Comparatively, CBDCs are monitored by the governing authority of a nation.
Grit Daily: What’s the relationship between a stable coin and Blockchain?
Paolo Ardoino: Stablecoins such as Tether make the crypto economy much more efficient by putting dollars on the blockchain. By using the blockchain—the same technology that powers Bitcoin—stablecoins are able to move currencies in a transparent, efficient, and decentralized way.
Tether tokens are currently being used to disrupt everything from the digital payment space to e-commerce purchases to facilitating transactions within decentralized finance. Tether can easily be transferred between exchanges or people, instead of transferring money through banks. It is easy to buy and sell and is available at the place you buy your cryptocurrencies (exchanges). Tether is often used as a way to hold money on exchanges when traders feel the market is extremely volatile.
Stablecoins are also being used to facilitate cross-border trade and remittances to emerging markets. For example, Tether provides a stable and efficient way of transmitting dollars. It is widely used by tens of thousands of traders daily across Asia, Latin America, and Europe simply because it makes trading and arbitrage, among other things, more efficient.
Grit Daily: Naturally, how can non-fintech startups benefit from this tech?
Paolo Ardoino: Stablecoins present an inherent benefit to everyone, from everyday traders to non-fintech startups. This is because at its core, stablecoin technology presents an opportunity for people to interact with the larger crypto ecosystem. Tether is a resource for the unbanked, a tool for an evolving payment system, and a leader in driving the mainstream adoption of a new financial revolution.
Grit Daily: From your point of view, what’s the difference between USDT and USDC?
Paolo Ardoino: Tether is able to distinguish itself from competitors as it holds a strong, conservative, and liquid portfolio with an emphasis on safeguarding its reserves. It continues to lead the industry in terms of its quarterly assurance attestations by independent accountants, proving that all tethers are fully backed and reserved. Those reserves have also been stress-tested. Most importantly, it has never refused a redemption to a customer. Unlike our competitors, our core target remains individuals and not banks, as such, we are able to a popular, liquid, trusted, and transparent stablecoin.