Tether CEO Paolo Ardoino recently stated that central bank digital currencies (CBDCs) may potentially turn money into a tool of government surveillance. Tether is the issuer of the world’s most popular stablecoin by market cap, USDT.
During the recent TOKEN2049 in Singapore, Ardoino noted that governments view CBDCs as progressive, and that they might use them to control consumers rather than enabling financial inclusion for the financially underserved
CBDCs are digital representations of a country’s fiat currency that are issued and controlled by its central bank. And unlike decentralized cryptocurrencies like Bitcoin, they are said to be completely centralized (making transactions fully traceable).
The Tether CEO also mentioned that when he first heard about blockchain and Bitcoin, he thought it was “like inventing the nuclear bomb, a powerful technology that could, in the wrong hands, be disastrous.”
He also cautioned that CBDCs might give government agencies complete oversight of digital money transfers.
According to Ardoino, Bitcoin is “freedom.” He also thinks that CBDCs present significant risks, such as those related to privacy and individual autonomy.
He added that the decentralized web3 ecosystem is “becoming the better payment layer, a better transport system for the dollar.” However, the ultimate freedom tool is Bitcoin, he claimed.
He further noted:
“If you own Bitcoin in your non-custodial wallet, that’s it — that’s the ultimate expression of freedom. Everyone should have a little Bitcoin, learn to secure their private keys, and understand what true financial sovereignty feels like.”
He pointed out that CBDCs could allow governments to monitor, potentially freeze, or censor monetary transactions in real time.
He explained that CBDCs turn money into “a permissioned network controlled from the top.” Meanwhile, Bitcoin does the opposite by giving power back to individuals.
Ardoino also acknowledged on the role of stablecoins such as Tether’s USDT, particular in nations that may be struggling with high levels of inflation like Turkey or capital controls such as Venezuela.
He also clarified:
“I was never the person saying USDT is better than Bitcoin, absolutely not. USDT is a better expression of the potential of the U.S. dollar. Our job is to help the United States bring dollar access to places where it doesn’t exist like Nigeria, Turkey, Argentina, Bolivia. For people living with collapsing local currencies, just being able to transact in a stable dollar is already life-changing.”
He further explained that stablecoins provide a somewhat balanced, more practical middle ground between complete decentralization and excessive government control.
As widely reported, stablecoins adoption has surged dramatically.
The total stablecoin market cap is approximately $310 billion at the time of writing, with Tether (USDT) accounting for nearly 60% of the share, at roughly $177 billion.
It is followed by Circle’s USDC stablecoin with 24.4% at about $75 billion.
China is already testing a digital yuan, and Europe is planning to provide a digital Euro to consumers in a few years. In the US, the concept of a CBDC has been viewed with skepticism, with few supporting the concept.
Interestingly, there has been a rise in the popularity of privacy coins like Zcash (ZEC), and their prices have surged dramatically as of late.