Paolo Ardoino, CTO at Bitfinex, Says Tether’s USDT Stablecoin Will Remain Relevant Even When CBDCs are Launched

Paolo Ardoino, the CTO at Bitfinex and Tether and a highly skilled computer programmer, recently noted that the fairly recent involvement of world governments in projects aimed at launching their own central bank digital currencies (CBDCs) should not have a negative impact on stablecoins like Tether’s USDT.

USDT, the world’s leading stablecoin, has a market cap of over $10.2 billion, according to Stablecoinindex data. However, USDT is no longer the only option traders have, because many other stablecoins such as USDC, Paxos, True USD, Gemini USD, among others, have also been launched. These coins generally have greater transparency than USDT and consistently publish auditing reports that confirm that the amount of stablecoins they have in circulation is backed with adequate reserves.

Ardoino has predicted that Tether’s USDT will continue to exist even when CBDCs are launched. He pointed out that USDT has been issued on several major blockchain networks such as Algorand, Ethereum, EOS, Liquid Network, Omni, and Tron. He believes that Tether’s demand should remain stable because it has been issued and accepted on most major cryptocurrency networks.

Ardoino points out that USDT has dwarfed the market caps of other stablecoins such as Circle and Coinbase’s USDC, Binance USD (BUSD), and all others.

However, stablecoins like Tether have the potential to be used to carry out illicit activities, as cryptocurrency transactions are not properly regulated or loosely regulated, because they’re a fairly new development that lawmakers might not yet fully understand.

Tether has been forced to blacklist 40 different Ethereum addresses that were holding millions of dollars worth of USDT. Notably, 24 of these addresses have been banned in 2020. Centre Consortium, an organization that involves Coinbase and Circle and issues the USD Coin, also had to blacklist a cryptocurrency address because it had received funds that were allegedly stolen from another address.

Stuart Hoegner, general counsel at Bitfinex, which is Tether’s sister company, claims that Tether regularly helps and cooperates with law enforcement during their investigations.

Hoegner told The Block that through its freeze address feature, Tether is able to assist individual users and exchanges with recovering millions of dollars that could have been stolen by hackers. There’s currently over $5.5 million in USDT that’s held in blacklisted addresses.

Although the ability to blacklist certain addresses and freeze funds might be a useful feature, it proves that these digital currencies are not truly decentralized. If a centralized entity has to step in to fix problems, then a cryptocurrency platform is not truly decentralized, like they claim to be.

While some industry participants believe that stablecoins will have a market cap of $1 trillion+ in the next five years, the emerging sector has experienced many challenges. Tether and Bitfinex have been subpoenaed by the US Securities and Exchange Commission, as they’ve been questioned about whether they have adequate reserves to back the amount of USDT in circulation.

Bitfinex and Tether also apparently lost $850 million while working with Crypto Capital, an allegedly fraudulent digital currency payment processor.

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