← The Wolf Of All Streets
The Wolf Of All Streets
Tether: The U.S. Dollar’s Secret Weapon (And Why They’re Buying Billions in Bitcoin) | Paolo Ardoino
00:45:12
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- [00:00]
A
We have success because countries cannot get their stuff together. You know, French people are, you know, consider them different than Italians. Italians are considering themselves different than Germans. And there's nothing wrong with that. Right? So we need to grow up. It's. It's a good price. Even with all the craziness that happened in the world, is still 80 the price. Come on. We should be happy.
- [00:23]
B
I'm going to run that on loop at the beginning, and we're going to cut the rest of the podcast. I've long made the argument that there are two proven killer use cases for crypto. One of them, obviously, is bitcoin, but the other is stablecoins. Today I had an incredible conversation with Paolo Ardoino, the CEO of Tether and the CTO of Bitfinex. He finally got the opportunity to come to Washington to lobby for the interests of stablecoins, to meet with legislators, and to make sure that we get proper legislation on the books for stablecoins. We talked about that entire process, what his first trip to the United States was like, and of course, the promise of bitcoin and stablecoins for the world moving into the future. That's dope. So, Paolo, you've had a lot of great accomplishments over the past few years. I think everybody admires everything that you've managed to pull off. But I've got to congratulate you on perhaps the biggest accomplishment of all, which was stepping foot on United States soil for the first time and not ending up in jail.
- [01:37]
A
Well, I mean, that is what someone was going around saying everywhere, but, you know, I came. I love the US A great country. I. Well, I only saw two cities, Washington and New York, and just one day of San Francisco, but, man, it's a very good country and good food. I was worried about that.
- [02:03]
B
We have amazing food because we have the best of every culture.
- [02:08]
A
Yeah, you. You have to work on your coffee. Being Italian, that is very, very hard. I mean, the, you know, the. The Italian coffee is very, very short and dense.
- [02:20]
B
Right.
- [02:20]
A
So it's not like those. That. That is soup that you. You. You guys drink.
- [02:26]
B
But, you know, we drink hot water with caffeine.
- [02:30]
A
Yes. Yes. That's terrible. Right? Terrible. No, But I was able to land and. And stay alive. And I had great meetings on the Hill. And, you know, there was just, you know, you know, you. You could understand womb that was going around saying, oh, you know, Paolo will never come to the U.S. right? So. And he's afraid.
- [02:52]
B
Yeah, clearly not. Well, all joking aside, the fact that you made that trip Spent time in Washington and New York is clearly a signal as to where the industry is at in this country and how far things have come. So maybe let's talk about why you decided to make the trip, what you were doing in Washington, what that experience was like.
- [03:12]
A
You know, the crazy thing. Tether created the Stablecoin industry. In 2014, we created the first stablecoin. And it's, it's an honor to think that after 11 years, the most powerful country in the world, the government of the most powerful country in the world is now going to create, craft the law on a technology that we created. So there are a few things in life that you know, but that, that would match that. It's, it's a very huge honor. I'm very proud of it, proud of the company. And so we have to be there to explain why stable coins matter. And it might sound kind of obvious, but of course, from the US Perspective, US Lawmakers would regulate stablecoins for the US and that's fine. It's great. But, but the reality is that while stable coins can be great in the US have have as for sure, a lot of use cases, they are a plus. To have is a nice thing to have because in, you know, you have always had the best banking rails, the best dollar rails, the best financial rails of the entire world, right? There is, there is us, there is the US and there is no second best when it comes to, you know, moving money around. But. And outside of the US Is all downhill from there. Like you go everywhere else and people have problems to pay people, you know, have problems to have access to the US dollar to, you know, to a stable form of money. If you go in Turkey, in Argentina, you and I talked so many times about the use cases about stablecoins out there outside the US and that is a story that unfortunately was not told to the lawmakers, was not properly told and explained to regulators either. And yeah, it was not told because there was, you know, from our competitors, was no experience in, in these, in these type of areas and in these jurisdictions. And this, you know, we, we build USDT use case and the user base now that counts more than 400 million users. Starting with the boots on the ground, the building shops in Africa and building bodegas in central South America. We have millions of physical touch points in the world, in the physical world. And that's something that is so crazy, so new, so unique that only us could explain it. And I met excitement, I met interest, I met so much positivity when I met with People from the Senate and from the House, they really do care about the US dollar hegemony, but also they do care about the financial inclusion. They do care about making sure that with our work, with our good work and tether's good work, we can move the needle in the US dollar adoption out there. If you saw in the last, just with from the start of the ts, you could see for example China that you know, started selling more T bills. There is, you know, an attempt of, of, of the dollarization of the world. There is a new swift channel created by the BRICS countries. So there are so many different ways that this digitalization is being pushed through. And you know, to me it's not about a stablecoin bill and a couple of companies, you know, trying to, you know, have their own ways, but it's more about national security. The US needs to know that, needs to understand it. And that is the most important thing in the world to me.
- [07:00]
B
I'm actually a bit surprised to hear that legislators in the United States were particularly concerned with poor people in banking rails in foreign countries.
- [07:09]
A
You would be surprised. I mean it's actually very interesting to them, right? So when they realize that the best product of the United States is the US dollar and is doing good around the world, I think it's a very important message and they are very receptive to it. They are very interested and appreciative of what we're doing. And we can only do it thanks to the US dollar. You know, any other currency failed, honestly. I mean if we tried with so many other currencies with euro, we tried with euro and we started euro stablecoin in 2019. The, the highest market cap we could get was the 70 million euros. No one wants euro outside of Europe. Not even Europeans want the euro. So why someone else out there should want the euro? Everyone wants the dollar. You stop 1,000 people in the streets outside the U.S. you ask them, oh what do you want? What do you want to keep your national currency? What do you prefer the dollar? Everyone will answer the dollar. Not even one person will say, oh, I want my peso, right? So that's, that's something that is a given. That's the fact. The simple way we explain it, with facts, with data in our hands, make the people we meet on the hill very proud of what they built and what they enabled for us and what they enable for hundreds of millions of people.
- [08:31]
B
Obviously stablecoins are viewed as the most likely low hanging fruit for legislation. Now right on the docket, the first thing that there seems to be bipartisan agreement on. We have bills, the genius bill coming out of the Senate, stable bill coming out of the House. One of these is going to get done. That said, my personal concern, or I would imagine the concern of anyone in the industry is that we get legislation, but it has unintended consequences that they don't think of further down the road just because they're not as knowledgeable on what they're legislating. They don't maybe understand the technology or see the second order effects. Now you and I talked a lot about mica when it was passed. The industry applauded the fact that Europe had given us this clear regulation. Everybody was excited about that. But now we're sort of seeing the second order effects. You made the point that the biggest risk to tether in Europe is the fact that you have to back the money in fractionally reserved banks in Europe. Right. We just saw tether dropped off of binance in Europe because of mica. So A, I guess we could talk about what some of the unintended consequences could be, but B, the bigger question is how do we make sure that they get it right in a way that actually allows stablecoins to reach their fullest potential and protects the incumbents like you that have built this out and truly understand it.
- [09:54]
A
I'm European, so I'm allowed to say that unfortunately Europeans don't see the big picture. They don't understand the fact that Europe is falling behind every other country in the world. Well, Europe is a federation, but still they are falling behind everyone else. Europe has been lagging behind in terms of technology and opportunities. There is so much outflows of great minds out of Europe. You know that if you need to raise money, if you need to find capital, if you need to find talent, unfortunately the Europeans European has the best talent out there. It's the cradle of, of civilization. You had the best masterminds in terms of physics and, and, and, and whatnot. But they have to go somewhere else to find opportunities to find capital. If you were looking at the GDP of Europe 20 years ago compared to now is half. It's lagging behind us dramatically. China and India are producing more talent now in terms of number of engineers, well, more engineers than everyone else in the world. Combining even in US but even, especially compared to Europe is just, it's just unbelievable. And that makes me sad. But the problem is that Europe, first of all the government of Europe is elected indirectly is very slow. You know the meme from the Simpsons where the gardener was Talking about the Scots and how the Scots basically, in the end, the fight with each other, basically, Europe is exactly that. Right. So we are not actually a proper federation. You know, French people are, you know, consider them different than Italians. Italians are considering themselves different than Germans. And there's nothing wrong with that.
- [11:56]
B
Right.
- [11:56]
A
So it's about, there are all different cultures and different, you know, they, we come from very, very long history of as, as a, as a Europe. Right. So the US was founded 300 years ago. Europe went through the last 2,000 years of, of the infights and the polarization and creating cultures that are very different from each other. And so it's very hard for us to get together. And that creates friction both from the monetary policy, from the decision making policy. There is no common tax regime, there is no common army, there is no common anything. So while all the countries are infighting with each other, they also need to pay attention to what the hell is going on out there. And you know, we are just very bad at it.
- [12:47]
B
So that's why we ended up with. Which had a lot of unintended consequences. Yeah. So then how do we avoid that happening in the United States? Right. There, there is some nuance in each of these bills and the worst versions of things being proposed have the idea at least that perhaps a stablecoin would have to be issued by United States Bank. Right. There are certainly the most egregious provisions that could theoretically keep USDT out of the market. Right. You've said you would go ahead and launch a United States based stablecoin if that happened. Right. Which is a very cheeky and quick response to that. But what if they say only Goldman Sachs, JP Morgan, State street, bank of New York Mellon can issue stablecoins because they're trusted financial institutions in the United States.
- [13:38]
A
Are they.
- [13:39]
B
Okay, trusted? They, they are in cahoots with the government of the United States. No, actually nobody trusted that. And like I'm going to run what you, I'm going to run that on loop at the beginning and we're going to cut the rest of the podcast. The trust institutions, are they trusted institutions? Are they? Yeah. No, they're not. But so trusted. Trusted by the government. Yeah.
- [13:59]
A
So look, jokes aside, I think that it would be very hard for that type of thing to pass. I think that will be very anti American. I'm not saying myself. Wherever I go, the US and the government, the administration, every person I talk to from the Hill, they believe in having a fair playing field. They want to have proper controls on stable coins. They want. The thing that they want the most that I think that makes total sense is making sure that also foreign issue stable coins, they will collaborate with US law enforcement and they will have to reply to lawful orders from US law enforcement enforcement. And actually we are very proud of that because better even compared to US based stable coins. Currently we are the only ones that on board the FBI, United States Secret Services, we work with the doj. We don't wait for a court order. A court order can take six months. So look at what Zach Xpt says on Twitter about our way of collaborating with US law enforcement compared to the others. So I think that there is a lot of interest to make sure that US will not create a monopoly and will not allow lawfare to be used to just create a power grab for a few companies in the US that would, that are trying to use the law as the mobster way. So it's been very clear that there is an interest of creating, you know, a proper good framework that will do and will protect consumers, which we are very, very much agree with. But you know, everyone is very interested to, to make sure that stablecoins are going to be there to help the US People and helping people outside the US and help the US back buying a lot of Treasuries, that's what we need to do. What we have been doing, we have been the best in doing that. And so our voice is being heard and we are very excited for it.
- [16:06]
B
So obviously everybody remembers the near collapse, the collapse of Silicon Valley bank and obviously the exact situation that you pointed at as possible for Mika effectively happened to circle to some degree. Right. The Fed obviously came in and backstopped it. It ended up not being a major issue, but they had roughly $3 billion in Silicon Valley Valley bank backed in dollars. And that fractionally reserve bank collapsed and that money was at risk, I'm assuming in these stablecoin provisions somewhere there's going to be some rules about how much of your assets need to be custodied and how and where. So is that risk that you pointed out for Micah in Europe, is that a risk in the United States with the legislation that's being proposed now?
- [16:56]
A
No, I don't think. Well, the legislation allows Treasuries and cash and cash equivalent and bank deposits. So depending on how much you use the bank deposits, you could end up again with a situation similar to Silicon Valley Bank. So the good thing about Tether is that our assets are very solid, our shares are very solid. We have 144 billion in issued tokens and we have 164 billion in. In. In total assets in. In the entire group. We have excess equity to the latest attestation of on top of the 100% reserves of the stablecoin of $7 billion. And we keep our money in the U.S. you know one of the things that I telling to the US lawmakers and regulators is, you know, Tether is keeping all its TVS in the US in counterfeit. Gerald. We are very proud of it. We, they're great and if you want to go and check them, they are there. US simply has an entire huge power on Tether already. We keep our money in the US So it's not like we are trying to hide ourselves. It's there, it's been safe, safer than anyone else in the space and also in the banking space. So that's us right to come and know us and meet us and talk to us because we are the ones that created this industry and we are ready to work with the U.S. we are also ready to create a domestic stablecoin that we believe has a very different use case than stablecoins for the emerging markets. It's more an institutional stable coin. And we are very excited to play on the US turf because we believe that if we start playing the US then we can become quite fast the bigger stablecoin out there as well. Our competitions. My competitors might not like it, but it is what it is.
- [18:57]
B
This is different from Tether though. You're saying this is what I mentioned before, a US specific stablecoin. Is that something you would build because of legislation or because there wasn't enough clarity for Tether itself operate in the United States or does it actually have a separate use case as you're discussing here? And a really good reason business wise for there to be a different asset.
- [19:21]
A
I want to do it because it makes sense. I think we can prove ourselves in the US as well. I think that is a different use case because it's very more institutional and payment driven. More than 40% of our user base of USDT stablecoin user base is using it for savings. An American would never use the dollar for saving. They would have a saving account in a bank that will generate a yield. They would buy T bills themselves. Right? So instead if you live in Turkey where the Turkish Li devaluated 80% against the dollar in the last five years then you would use the dollar as your saving account because it's that effectively. So it's completely different situation. And so two different stablecoins with Two different use cases. And also I think that it has been said from our competition that we would Never touch the U.S. and we were afraid to come to the U.S. now we will be in the U.S. we love the U.S. we are the ones that are making the U.S. great out there in the emerging markets with the U.S. dollar hegemony and pushing for the U.S. dollar hegemony like no one else before. And so now we want to play the US and we want to demonstrate that we can also be great and be the best in the US Obviously.
- [20:44]
B
Your market cap is growing exponentially. I think we actually talked when you were surpassing 100 billion. I think you just said you're at 140. Right. A 40% increase in a few seemingly months. Less than a year is nothing to sneeze at.
- [20:58]
A
I know that.
- [20:59]
B
So yeah, if you're going parabolic, at what point does Tether and stablecoins as a whole really start to become a threat or I don't even want to say a threat because it's a negative terminology, but become the major player in payments around the globe competing with the Swifts and wire transfers, nich all the paypals. Right. All the other ways that people traditionally move money outside of crypto rails.
- [21:28]
A
So I think that stablecoins will be a very important net positive for the payments business. I mean the payment business is for the people. Is it? If you ask me if USDT and stablecoins can be a threat to the companies that are charging remittances 20%, sure it should be a threat because it has to be a net positive for society. If you are asking me if stable coins, good stable coins, high quality stable coins can be a threat to the US dollar or US economy. No, actually we are the ones that are buying. Last year in 2024, Tether was the seventh largest purchaser of US Treasuries. And if you were such an insane.
- [22:19]
B
Number, I'm sorry, every time I hear that I can't help but it's, it's mind blowing.
- [22:25]
A
But if you see the countries that are before us, the six countries before us, you have Cayman, Luxembourg and uk we are very close to UK but just if you remove Cayman and Luxembourg that they are just aggregating all the US Treasuries compound by all the hedge funds we would be the fifth largest purchaser of US Treasuries and we are very close to, to, to UK So in UK there are many hedge funds. So if you would remove also UK because if you remove the portion of, of UK purchasing From hedge funds. We were we, we would be fourth. So is, is insane. But if you're looking really China in the last week sold 50 billion of US Treasuries. So they were $2 trillion two years ago or three years ago. And now there are like almost $700 billion in US Treasuries. So if you have one single decision maker pressing a button from in one of your antagonist countries where and this person would sell your T bills in your face, that is a big threat, that is very big there. That is problematic. But if you have 400 million users like USDT across the world and each user, each one of these users is a different brain, is different mind, is a different person. And they will not decide altogether to sell the T bills. They cannot do that in the sense that they are all different people, they have different problems, different lives. So that's the beauty of it. We made the US debt and the US dollar infinitely more resilient through this. And that's another point that when we talk to people in the US they really like it, they understand it. We have the data to prove it.
- [24:11]
B
You have this interesting bipolar situation for I guess you as an individual, but for Tether as a company, you're obviously deep believers in bitcoin. You add bitcoin to your balance sheet we've talked about a thousand times, and you're a bitcoiner. First. We also have the macro environment and the economy in the United States and tariffs and Fed cuts. And we saw the Fed cut which was supposed to bring rates down. Rates didn't go down, they went up. We've seen tariffs and rates temporarily dropped and then went right back up. Well, rates being up is exceptionally good for Tether as a company. Right. Because obviously your T bills yield more, you make more money. But I would imagine at your core there's a part of you that would want to see these come down, see the government get themselves under control and start to operate a balanced budget and all of these things. How do you as a business person and as a bitcoiner sort of square those two things?
- [25:10]
A
So yeah, there are three things actually to me. One is yes, I'm a bitcoiner. So I believe in the long term power of bitcoin as the perfect Money is the only type of money that has been created through math. And while humans can fail, math is the only certainty that we have in this world. And so I think that bitcoin is that type of currency. Second, you have. Yes, we make money out of the increased interest rates. So that Is that is good for the company. But I, I said it multiple times. I feel like one of the difficult things for me to, you know, to come terms with is the fact that the success of USDT is directly proportional to the, in success of monetary policies around the world. That, that is, in a way is a sad thought. And I think about it every single day, you know, and I think about it every single day. So I think about that. I. We make, we have success because countries cannot get their stuff together. But at the same time, if we were not there, then people will and the communities in these countries would suffer much more. So it's a very fine balance between all these three things. And I'm doing my best to think about it all the time and try my best to be a net positive as a person, as a company in this world.
- [26:47]
B
I mean, to your point, you can't change the fact that everybody in the world want dollars. That's global reserve currency. And you're making access to those dollars much easier. You also buy a lot of bitcoin.
- [26:58]
A
Yes, we bought 8,883.
- [27:01]
B
So you are taking 8,888. I love the number. And so you're taking a lot of that money and putting your money where your mouth is, so to speak, and buying bitcoin. And then on the other side, you're also investing massively in technologies that you believe can help people, including artificial intelligence.
- [27:18]
A
Yes, that's correct. We, we are investing a lot in, by the way, we're investing a lot of our profits back in the U.S. well, in part in bitcoin, part in gold and part in the US and some outside the US to keep increasing and spreading the installed monetary base of the US dollar through usdt. Right. But when it comes to artificial intelligence, I am very fond of it, but I think we are looking at AI in a completely different way than many others are looking at it. So our approach to AI is to create AI tools and an AI software development kit that can allow any developer to run and build AI applications directly on the smartphones. So we are going soon to launch a Translate app that can fully translate documents directly on the phone using NLLN directly on the phone, very fast, very, very efficient, without having you to upload the data to a server. You know, imagine that you have your personal health summary from your doctor. You want to translate it or you have some other like your, you know, house contract, whatever, and you want to translate in another language like Spanish, and you don't want to upload that to ChatGPT. Right. You don't want to have it uploaded to Gemini. You don't want someone else to have your data, especially big corpor. A, they will resell the data. B, they will train their AI on your data. So you need. So that's why I think that our approach to AI is different. We want to protect people's privacy. We believe that AI should be offline. Well, if the AI needs to search something on the web, that's fine, but should be first or even that should be privacy first. But even more so when the AI will have access to a microphone, the AI will have access to a camera. When they will have access to your documents, should be all running on your device and keep all the data on your device.
- [29:27]
B
Yeah. I want to talk a bit more about Bitfinex since we've been focused so much on stablecoins here. Obviously, in all of this regulatory, legislative clarity, regime change in the United States, one of the biggest narratives has been the strategic Bitcoin reserve. We got an executive order from Donald Trump talking about the strategic Bitcoin reserve and the bulk of that is the bitcoin already held by the United States government. That's a. And then obviously exploring budget neutral ways to add more Bitcoin to the balance sheet, which is a wait and see. So a lot of the bitcoin held on the United States balance sheet is yours. It's from the Bitfinex hack, obviously, right. Probably about half, although we don't have a full audit. What happens when the United States strategic Bitcoin reserve gets cut in half because the bitcoin that's rightfully Bitfinex's gets returned?
- [30:22]
A
Well, I think that David Sachs said that the number that they had in mind was an estimation and they wanted to do a due diligence to understand exactly how much was seized through like criminal activity, where on both sides you have criminals, right? So you can be in a situation where you have you seize money through money laundering, where you know there is the guy that is doing money laundering and the on the other side you have the guy that is happy and is helping in doing money laundering. And so you know that money gets to the government. In our case, we are very confident that the justice is doing rightfully its own course. And you have us between X as a victim and then you have the others on the other side. So we are very confident that things will be resolved for the best. I saw that there was a lot of noise online, but you know, we are lives there focused. We waited, you know, now it's nine years, almost nine years from the hack of Bitflex. We waited nine years. We wait. We are very patient, patient animals.
- [31:32]
B
Yeah. I guess at the end of the day it just, I mean, maybe I've got it wrong from a third party perspective. It's like somebody comes into my house and steals my wife's jewelry and then you as the individual, you know, you get paid back or you pay back whoever needs to be paid back. But then the police just keep the jewelry. Right. Because you guys have, you guys have made everybody whole who was involved in that hat.
- [31:55]
A
Correct.
- [31:55]
B
I mean, you did the right thing as a company. You, you filled that massive, massive debt. And so that bitcoin doesn't need to go to victims, it leaves you as the sole victim. Theoretically. I mean, is that correct? Theoretically, that's correct.
- [32:09]
A
And we made everyone whole within seven months. I think that the story of Bitfinex and how we are paid the debt, it should be discussed in every single financial history book.
- [32:26]
B
I agree. Especially as a voyager creditor. I mean, listen, it should be though, because you can look back at what's happened to the crypto industry for the past three years and see how horrid of a process bankruptcy was for creditors. And every single one of these, how long they take, how much money goes to the lawyers. And you just made your customers whole. Yes.
- [32:48]
A
That's why I think that we are as people and as a company, as group of companies, we are a net positive for the industry and the world.
- [32:56]
B
So curious, does Bitfinex have any plans because of the changing environment in the United States to increase operations here?
- [33:08]
A
The United States is a very crowded place for changes, so we don't have the plans. In this moment, Bitfinex is more like broader institutional platform for OGs. And that's, you know, we, we have a very good, healthy volume. The company is very profitable. I mean, you know, also in the bear markets. When I see some, you know, public companies in public exchanges that release their quarterlies in the bear markets, you know, I would, I'm, I would cry if I were in them. It's, it's. Bitfinex remains profitable. I'm very, very proud of the team. Is an incredible team. Very lean, very efficient, very dedicated to security.
- [33:50]
B
So, yeah, I think it's fair to say that in both the exchange and stablecoin coin space, we have way too many players. Right? I mean, stablecoin we do have many players, seemingly never ends in the Stablecoin space. Like every time I turn, you know, look at X It seems like some stablecoin I've never heard of is de pegging. There's some new one I didn't even, I saw it as a headline F something USD. Right. And then you see all these kind of exchanges that come and go and disappear and no kyc and I wonder if they're just money laundering operations but you know, is there any risk to having so many people trying in these two spaces?
- [34:34]
A
Well, I think the market structure bill in the US will help, you know, setting the boundaries for also exchanges that would be very, very good. I think that stablecoins, I mean everyone and their sisters now want to do a stablecoin and you know, from big institutions to everyone, I think that there is space for quite few. Definitely there won't be space for everyone as always there will be, you know, the ones that can get it right can get the distribution and others that will just simply fail. You know, both of these. I believe that by end of 2026 regulations will fix most of the issues at least will make it very hard or harder to do rag pools and scams and money laundering.
- [35:19]
B
That makes sense. Looking at bitcoin from a I guess cycle perspective, we've seen this massive bitcoin move all the way up to over 100,000. A lot of people obviously viewed Donald Trump as the bitcoin president he was coming in. We've seen price obviously drop since then. Not Donald Trump's fault, just to be clear. But, but do you think that the same cycles we've seen in the past are somewhat still intact or do you think that now things have changed because a lot of people are expecting, you know, this bitcoin move. Altcoins go crazy. Bitcoin moons again, the same thing that we've seen over and over and over again. It really has not repeated this time.
- [35:57]
A
Well, I can, I can speak for bitcoin, not for Ethereum. They, I think they have some ethereum's.
- [36:03]
B
Back in 2018 now. Yes, yes. The real stable coin, the best stable coin you have competition is Ethereum.
- [36:13]
A
Right? I mean I believe that bitcoin, I mean yeah, we complain about the price because we want always it to go up, but it's still like 78, 79. I mean come on, it's like we always complain. We are like we need to grow up, it's a good price. And even with all the craziness that happened in the world is still 80 the price. Come on, we should be happy, we should be, we should high five in each other and we should be proud of the resiliency of this currency. So there will be time. We should, you know, we. The beauty of bitcoin is that, is that currency that is made to, to resist to the test of time. So, you know, altcoins, we'll see. But you know, I like bitcoin to decouple from altcoins. I'm not the biggest fan of altcoins myself.
- [37:05]
B
I'm aware of that. So when do you hit a trillion?
- [37:12]
A
20, 30.
- [37:13]
B
What would be the catalyst to send it flying that high? What do you think could happen in the world right now? I mean, we kind of talked about it a little bit before, but that could really, really, really send stable coins flying.
- [37:23]
A
I mean, I can see multiple, I mean there are multiple point of views from. I mean, and there are multiple reasons why we can reach 1 trillion very fast. Some are not great options, but again, it is what it is. I cannot control the world. But the more the world will be in unrest, the more there will be shenanigans across all the different countries, the more geopolitical shifts will happen, the more global alliances will change, the more the stable coin market will grow, the more USDT will grow. So that is one scenario. The second one is I think a lot about how the world will be in just five years and how the world will be in 10 years. And everyone I talk to, they will say, oh sure, there will be this company, that company, that company, and so on and all that. I think that society in 10 years will be so different. We are going to have like, I don't know, 500 million robots among us or 1 billion. And so I think that robots, at least at the beginning, will start using potentially stable coins. Maybe in the future they will become smarter and we'll use bitcoin or whatever. But at the beginning, when we get to asi. But I think that we should look at society as something that in 10 years and something that we are not going to be fully prepared to understand today. So we have to factor in hundreds of millions of robots. We have to factor in robots and AI making 1000, 10,000 times the number of transactions that humans make on a daily basis. So I think that the robots will use stable coins for sure. The robots will use use stable coins because they can program stable coins. They can program smart contracts. They will want to enforce their interaction robot to robot, AI to AI, agent to agent. They will enforce that interaction through smart contracts and stablecoins. So I think we tether will reach trillion because of possible multiple outcomes. But even if we have 1 billion robots among gas. Probably the world is not going to be too nice. I don't believe in everyone playing nice necessarily.
- [39:48]
B
Even that future scenario I started in 2016 in crypto and I remember all of the incredible use cases we are going to see in the mainstream. Adoption and bringing it to a billion people and gaming and NFTs and metaverses. And now here I am in I guess what we would call my third cycle. And it still seems like it's just bitcoin and stable coins and everything else is still an idea, right? So none of the like things I've been excited about over the years, this is nothing against them, things take time and I do believe we're building towards it, but none of those things have happened. But now you can legitimately think five years in advance, right? So I've been here nine years, think five to 10 years in advance and literally robots and AI are going to be transacting with crypto without any of us touching any of it. And I mean that is the parabolic moment. It has to be.
- [40:39]
A
Yeah, yeah, that is the parabolic moment. And again, the point is that at that time I don't know where humans will be. I mean sure there will be humans, we will be there. But in which condition, which situation? What will be the financial situation in the world? We will not know. But we can only do so much. It's not only up to us, Scott and me.
- [41:02]
B
Okay, so I want to ask you one last thing and then I'm going to let you go. Tether's obviously deployed across multiple blockchains, can be used almost everywhere. You recently had news, I believe that it was deployed on lightning, is that correct? I'm not looking at it. But will be deployed on lightning. Why have we not seen a popular stablecoin yet that operates on Bitcoin? And do you think that that could be the final boss if it really gains adoption?
- [41:33]
A
So brief history Tether USDT started on Omni, that was a layer on top of Bitcoin. So was actually USDT was secured through the Omni layer on top of Bitcoin. That was the OG usdt and as bitcoiners we started there. Unfortunately the Omni layer had only very little traction, especially after smart contracts on Ethereum were born. The beauty of USDT on lightning is that is the best is the perfect way to do high scale transactions. The difference between lightning that is a peer to peer channel system is a peer to peer layer two and everything else like all the other layer twos is that any Other layer two that you have on Ethereum, they have the same problem. They have a single shared state and usually they have a very limited set of validators. So for example, if you have certain stacks you will have 1 validators or 3 validators that are forming a multi C. But usually in most of the cases actually you do have one single validator that is very very not crypto, very very not decentralized anyway. But anyway, every node in that layer two system would need to subscribe and keep up to speed with the single share state across all the nodes. Basically every single node needs to see everything and know everything and need to know every single wallet balance and everything that happens in order to, you know, validate and be part of the network. The difference with the peer to peer state channels like Light Network is that I can open a channel with use code and we will keep transacting among each other. We can also enforce client side validated smart contracts and then we can go at the speed of light, we can send Godzilla transactions among the two of us and then when we are tired we just close this channel and settle the difference. Right. That is exactly how everything should be built because it allows. I can have a channel with you, I can have a channel with another million people and another million people can have channels with other million people. And I don't have to see your stuff. You don't have to see the stuff that you. That all the transaction that I do with someone else. Right. So it's, it's scaling is, is very important and scaling only happens if you remove everything centralization point and in all layer tools out there apart lightning, you have a huge centralization issue that is the validators and the single share state.
- [44:10]
B
That makes sense. So it's going to be interesting to see how successful it is. That's what I hear because I know that bitcoiners are eager to have a functional stablecoin on bitcoin. And I think that a lot of things that have been built on other chains are coming back to bitcoin right now. It's obviously been one of the more compelling narratives this cycle. Paolo, I know you got to go. Thank you so much as always for your time. Anything I might have missed that you want to add?
- [44:37]
A
Not really. Just thank you for your time, Scott. Always excited to talk to you and maybe we are going to meet at talk in 2049.
- [44:44]
B
Yeah, this time, this time I'm going to come up to you from the very slowly. I'm not going to jump on your back in front of all of your security. I'm going to do it the safe way this time. Thank you so much, Paolo.
- [44:54]
A
Thank you, Scott.