Tether CEO: Revealing how the world's first stablecoin USDT succeeded

At the Bitcoin 2025 conference, Tether's CEO Paolo Ardoino, the issuer of the world's first stablecoin USDT, delivered a speech. We can gain insights into his understanding and exploration of stablecoins from his speech, which may also provoke deeper thoughts.

Tether has launched the world's first stablecoin, USDT, since 2014. Since then, stablecoins have gradually become a bridge between traditional and digital finance in the crypto world. From Paolo Ardoino's speech, we can see why USDT is successful? Because it has long been not only a medium of exchange, but also a financial tool that can meet a variety of needs, it plays an important role in different scenarios, especially in the "disintermediation" life has become a core tool, helping individuals get rid of the shackles of traditional financial and technological intermediaries, and it is itself a successful financial technology product in the context of a special era.

1. Efficient Inclusive Trading and Payment Infrastructure

In the cryptocurrency market, price fluctuations are often quite dramatic, which brings certain risks and inconveniences to trading. Since the emergence of USDT, its stability linked to the US dollar has made it an important medium in cryptocurrency trading.

Specifically, before the emergence of USDT, if investors wanted to convert between different cryptocurrencies, they typically needed to first exchange one cryptocurrency for fiat currency, and then use the fiat currency obtained from the exchange to purchase another cryptocurrency. This process was not only cumbersome but could also increase transaction costs due to restrictions on fiat currency exchanges and fees. The emergence of USDT changed this situation, allowing investors to use USDT as an intermediary for convenient trading between different cryptocurrencies. For example, if an investor wants to exchange Bitcoin for Ethereum, they only need to first convert Bitcoin to USDT, and then use USDT to purchase Ethereum, greatly simplifying the trading process.

According to the data, USDT plays an important role in cryptocurrency trading. Data provided by Paolo Ardoin indicates that USDT accounts for 62% of decentralized trading volume, which fully illustrates its widespread use as a trading medium. It is precisely due to the stability and convenience of USDT that it has become the preferred medium for many cryptocurrency traders, contributing to the prosperous development of the cryptocurrency market.

In addition to being used for cryptocurrency payments, USDT also plays a role in traditional payments. In some regions, due to inadequate financial infrastructure, traditional payment methods have many inconveniences, while the digital characteristics of USDT allow for convenient payments online, meeting people's daily consumption needs—this essentially circumvents the restrictions of traditional financial intermediaries like banks, allowing individuals to directly control the flow of funds.

2. Global "Digital Dollar" Savings and Value Anchors

Paolo Ardoino believes that the outbreak of the epidemic has become an important turning point in the expansion of USDT application scenarios. Before the pandemic, USDT was mainly used as a medium for cryptocurrency transactions, but after the pandemic, it quickly transformed into a "digital dollar" used by hundreds of millions of people around the world, integrating into people's daily lives. ** USDT, as a "digital dollar", not only provides a way for people to save, but also plays a role in daily life payments, etc.

In some emerging markets and developing countries, the speed of local currency depreciation is astonishing, and people's wealth faces serious shrinkage risks. Taking countries like Turkey, Argentina, and Vietnam as examples, the currencies of these countries have depreciated significantly over a period of time. Residents need to find a relatively stable way to save in order to protect their wealth. Although the US dollar is a widely recognized currency internationally and has relative stability, there are certain difficulties in directly holding US dollar cash or opening US dollar accounts in banks for various reasons. At this time, USDT, as a stablecoin pegged to the US dollar, has become their most realistic choice. Approximately 35% of USDT users use it as a savings account, holding USDT to hedge against the risks brought by local currency depreciation and to safeguard the value of their wealth.

For ordinary investors, USDT can also be part of asset allocation. Including a certain proportion of USDT in the portfolio can help stabilize the value of the investment portfolio during significant market fluctuations, while also providing investors with a certain degree of liquidity, making it easier to make other investments at the right time.

3. Tools for a "Decentralized" Life

Tether is further developing multiple functions based on USDT, attempting to make it a tool for "decentralized" living. Essentially, it forms a corresponding ecosystem based on the fundamental functions of USDT.

**Reshaping the financial education and entrepreneurship ecosystem. **Tether cooperates with universities around the world through education programs to popularize Bitcoin and stablecoin education, and its core goal is to break the intermediary barriers of traditional financial knowledge dissemination - in the past, financial education was monopolized by universities and training institutions, but Tether allows more people to master the logic of digital assets through open source courses and practical cases. At the same time, Tether invests in the BTC Pay Server open-source project to promote the Bitcoin payment infrastructure, helping merchants skip intermediaries such as payment gateways and accept cryptocurrency payments directly; Partnered with Fulgur to create a venture capital fund to invest in Bitcoin startups to support the incubation of "disintermediated" financial projects from the bottom, so that entrepreneurs can obtain funding and technical support without relying on traditional venture capital institutions.

Brand disintermediation practices. **Tether's AI platform, KUBA, advocates for AI Agents to have their own Bitcoin wallets. In the future, your AI assistant may use stablecoins to pay API service fees, or even earn revenue through microtransactions – no longer dependent on the closed ecosystem of tech giants. Another example is Tether's cooperation with the city of Lugano, Switzerland to hold the Plan B summit, sponsor a local football club, and bring the Bitcoin and USDT brands to European stadiums, which is not only a marketing behavior, but also an entity penetration of the concept of "disintermediation" - traditional brand promotion relies on intermediaries such as advertising companies and media platforms, while Tether shortens the connection path between brands and users through direct cooperation with cities and sports IPs.

Four, Successful but Needs Standardization in Financial Technology Products

In terms of market penetration, functional value, business returns, and other metrics, stablecoins are undoubtedly one of the most successful innovations in the fintech space. The total market value of Tether's USDT will reach $153 billion by 2024 (equivalent to 1.5 times the market value of Goldman Sachs Group), the average daily trading volume will exceed $70 billion (more than three times the trading volume of Apple stock), and it will cover 420 million users, equivalent to 76% of global cryptocurrency users. The profitability is disruptive, and Tether will achieve a net profit of $13 billion in 2023, surpassing Morgan Stanley (10.7 billion) and UBS (9.2 billion). Tether holds more than $120 billion in US Treasuries, as well as more than 100,000 bitcoins and about 50 tons of gold.

However, it has also been pointed out that USDT has become a systemic risk amplifier, with the collapse of Silicon Valley Bank in 2023 causing USDT to briefly de-peg to $0.92. USDT holds more than 100,000 bitcoins, and if BTC plummets by 30%, it will trigger a collateral value crisis. Theoretically, all users can redeem at the same time, but the realization of treasury bonds requires T+2 delivery. USDT has also objectively become a geopolitical tool. The North Korean hacker group Lazarus laundered USDT through a coin mixer, and Iran used USDT to circumvent oil trade sanctions. According to Chainalysis data, stablecoins accounted for 82% of illegal transactions in 2023.

It can be said that USDT is a paradox that succeeds in the gaps of traditional finance and thrives in a regulatory vacuum. Its success essentially stems from the failure of sovereign currency governance (the collapse of inflationary national fiat currencies) and the inefficiency of financial intermediaries (predatory pricing in cross-border payments). As Tether's CEO stated, "We are not a money printing machine; we are a provider of decentralized infrastructure." The commercial miracle of stablecoins arises from its precise strike at the Achilles' heel of the modern financial system—yet its vulnerability also comes from the fact that this wound remains unhealed in the regulatory environment.

Where is the future of stablecoins headed? Former Vice Governor of the People's Bank of China, Wang Yongli, believes that "considering that stablecoins pegged to sovereign currencies (which are essentially tokens pegged to currencies) have been launched and operating for nearly 10 years, becoming increasingly refined and stable, one possible path is to use the technical framework of stablecoins to reform sovereign currencies, allowing sovereign digital currencies to be launched quickly and replace stablecoins (no longer requiring dedicated tokens)." He suggests that sovereign digital currencies must be able to replace stablecoins, which may imply that stablecoins are likely a transitional tool. ("Wang Yongli | Bitcoin, stablecoins, and central bank digital currencies should not be compared")

What characteristics do stablecoins have that sovereign digital currencies currently lack? We believe that merely focusing on the advantages of stablecoins in payment and settlement is not enough. Stablecoins have two significant advantages over traditional finance that deserve attention: programmability and smart contracts, as well as enhanced operational transparency. (Zhang Feng "Wang Yongli is closely watching stablecoins, but only sees their payment and settlement efficiency, which is not enough") Perhaps only by addressing these issues can we truly enable sovereign currencies to have the functionalities that stablecoins possess today.

In the development process of stablecoins, we must certainly pay attention to the regulatory, security, and other issues they face to ensure their healthy and stable development. However, we believe that with the continuous advancement of technology and the ongoing development of the market, the "decentralized" application scenarios of stablecoins will continually expand and deepen. In the future, stablecoins that are increasingly integrated into compliance frameworks will play a more important role in the global financial system, bringing more convenience and opportunities to people's lives and economic activities. (Image from the internet)