Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Tether launching a US
Speaker 1: regulated stable coin in partnership with Canter Fitzgerald and Anchorage Digital.
Speaker 1: The token known as USAT will be issued by Anchorage
Speaker 1: in compliance with the Genius Act. Let's bring in the
Speaker 1: Tether CEO Paolo Ardolino and Bo Hines, former White House
Speaker 1: crypto official who now leads Tether's USA USAT. Pallo, I
Speaker 1: want to start with you because it raises the question
Speaker 1: to me about the difference between USAT and USDT. Is
Speaker 1: the launch of us AT basically saying that USDT is
Speaker 1: not compliant under the Genius Act.
Speaker 2: Absolutely not.
Speaker 3: So we have expressly said a few times now that
Speaker 3: also USDT will be compliant with the Genius Act under
Speaker 3: the Foreign Issuer Protocol and there is a pathway in
Speaker 3: the GENIUSOC to make happen, and that's what that is
Speaker 3: focusing on. But at the same time, we felt the
Speaker 3: need to create a domestic stable coin in United States
Speaker 3: that is focusing on the actual needs of the US market.
Speaker 3: It is a very efficient market compared to all the
Speaker 3: emerging market developing countries, where USDIT is leading the way
Speaker 3: into financial inclusion and growth and banking. The bank or
Speaker 3: the under bed. But while in the United States the
Speaker 3: landscape is different. There are a lot of many competitors
Speaker 3: in the financial and efficient in that sector. So USAT
Speaker 3: is going to be specifically designed for the growth of
Speaker 3: the United States and within the United States.
Speaker 4: So well, let me ask you, then, who exactly is
Speaker 4: USAT targeting? What kind of customers are you going after
Speaker 4: with this particular stable coin, and why would they need it?
Speaker 4: What's the pitch?
Speaker 5: Well, look, you know, our payment rails in the United
Speaker 5: States have been archaic for quite some time.
Speaker 2: I liken it to technology development.
Speaker 5: The way we communicate, the ways in which we move
Speaker 5: money has really remained stagnant, and so obviously with Genius
Speaker 5: passing into law and the adoption of stable coins, I
Speaker 5: think this revolutionizes our financial system and truly a way
Speaker 5: that we've never seen before. It makes payments more cost effective,
Speaker 5: it gives us instant settlement times, It allows us to
Speaker 5: move money overseas in a much more expraditious way. So
Speaker 5: you know, we're looking at a completely new world. I
Speaker 5: think the customers that we're looking to serve are both
Speaker 5: global financial institutions that obviously have deep ties to US
Speaker 5: capital markets, along with consumers that have been under banked
Speaker 5: or underserved for quite some time and don't want to pay,
Speaker 5: you know, insane amounts for transaction fees when they're just
Speaker 5: moving money to friends and family.
Speaker 1: So, Palla, how do you effectively out compete USDC here
Speaker 1: from circle? How is your strategy different from theirs? Because
Speaker 1: if we think about these, I mean you essentially have
Speaker 1: to convince us that these aren't commodities. And I don't
Speaker 1: mean commodities in the way that they're classified by regulators.
Speaker 1: I mean commodities in the way that they're not necessarily
Speaker 1: different from one another.
Speaker 3: Well, that's a very good point, but I think the
Speaker 3: only thing that matters, or well the most important strategy
Speaker 3: here to compete is distribution that are built over the
Speaker 3: last eleven years now the biggest distribution network physical and digital,
Speaker 3: probably in the history of humanity. You are not saying
Speaker 3: that likely. So we have hundreds of thousands of physical
Speaker 3: distribution places in all the emerging market development countries. We
Speaker 3: have partnered with Ramble and invested in Ramble as a
Speaker 3: huge distribution channel within the United States with like.
Speaker 2: Sixty million active users per month.
Speaker 3: I mean, we have our ability and we have partnered,
Speaker 3: we have invested, so we don't have like our competitors
Speaker 3: to rent out the distribution channels. We own them, we
Speaker 3: partner with them, and so we can leverage to maximize
Speaker 3: the profitability, but also reinvest in our own ecosystem to
Speaker 3: make it wider, to make it more efficient and cost
Speaker 3: effective for every single user.
Speaker 1: Well, one thing that's really interesting I think that's happened
Speaker 1: over the last few months is the idea that stable
Speaker 1: coins is no longer just the purview of companies that
Speaker 1: focus on digital assets. And indeed there's reporting that indicates
Speaker 1: companies such as retailers or even payments firms are interested
Speaker 1: in adopting this technology. Can you share with us any
Speaker 1: conversations that you've had with executives and other companies that
Speaker 1: are interested in this digital asset.
Speaker 5: Well, you're seeing this with the larger banks in the
Speaker 5: United States as well. People are talking about issuing their
Speaker 5: own stable coin. You know, I think they're going to pivot.
Speaker 5: I think that many of these firms are just a
Speaker 5: little bit out over their skis in terms of understanding
Speaker 5: the technological needs that must be there.
Speaker 2: In order for the infrastructure to work properly. And that's
Speaker 2: something that we have at tether.
Speaker 5: We have the best technology, we have the distribution channels
Speaker 5: as Palo is described.
Speaker 2: I think that we'll have many partners in this space.
Speaker 5: We'll collaborate with many of the traditional financial institutions in
Speaker 5: the United States to build out the best product for
Speaker 5: their consumers. I think that we will be adopted far
Speaker 5: and wide here in the US, both with from the
Speaker 5: consumer perspective as well as the institutional perspective. And I
Speaker 5: think that we'll set up these corridors to move money
Speaker 5: in ways that you know, people have never seen before.
Speaker 1: You mentioned it should be the most you mentioned financial
Speaker 1: Let's make news here. Are you speaking to any of
Speaker 1: them right now? Have you spoken to any of them?
Speaker 2: Well, look, we're talking to several of them.
Speaker 5: We'll have fantastic news release in the coming months.
Speaker 2: I think we'll have many partners, not just one. We're
Speaker 2: not going to be exclusive. Look, we're agnostic.
Speaker 5: We want to help as many consumers as possible in
Speaker 5: the US, and we want to help as many businesses
Speaker 5: that we can as well.
Speaker 4: All right, so that means you're coming back on to
Speaker 4: tell us when you do have news right now? Well,
Speaker 4: you just committed yourself to that, Paolo talk a little
Speaker 4: bit about how USAT, the US regulated stable coin that
Speaker 4: you're launching here, will differ when it comes to what
Speaker 4: is backed by. We know that USDT is backed by
Speaker 4: short term US treasuries along with some other cash equivalents.
Speaker 4: What is USAT going to be backed by?
Speaker 3: So USAT will be backed by US treasuries again short term.
Speaker 3: I think that is in the biggest interest of the
Speaker 3: United States and also US companies, but also Tetter as
Speaker 3: a broader company, to showcase strong alliance with the United States.
Speaker 2: We have with USDT. Specifically, we have held the US.
Speaker 3: Dollar gemony as no other product in the world, and
Speaker 3: so we plan to continue to do the same with
Speaker 3: the USA t And so we want to make sure
Speaker 3: that every single USAHU user user, user knows that there
Speaker 3: is a strong backing, liquid backing any point in time
Speaker 3: that can redeem USAT for a dollar and use it
Speaker 3: in a very similess way throughout all their digital life
Speaker 3: and physical life and both.
Speaker 4: This is all part of a larger plan to grow
Speaker 4: dramatically over the next one to two years. You've been
Speaker 4: very vocal in saying that you want to dominate. Do
Speaker 4: you have any specific growth targets that you could share
Speaker 4: with us.
Speaker 5: Well, look, I mean, we want to be the largest
Speaker 5: player in the US market. We already are abroad, we
Speaker 5: want to match that here. And you know, I've said
Speaker 5: this repeatedly over the course the last few months in
Speaker 5: my former role at the White House. You know, I
Speaker 5: firmly believe that as tokenization occurs, so well capital flow
Speaker 5: into stable points. We want to have seamles on and
Speaker 5: off ramps to our US capital markets. You know, if
Speaker 5: we have tokenization of public securities, people are going to
Speaker 5: be using stables to go in and out of those
Speaker 5: different asset classes, and we want to be the best
Speaker 5: stable in the marketplace to do so. I think we'll
Speaker 5: have many fantastic partners, whether it be institutional banking firms,
Speaker 5: whether it be market makers, etc.
Speaker 2: And so, you know, we're.
Speaker 5: Talking to a plethor of different folks about how these
Speaker 5: technologies can plug into their current ecosystems. I think they'll
Speaker 5: adopt them very quickly and we'll be able to set
Speaker 5: up a new payment real system in the US that
Speaker 5: benefits the US consumer in a tremendous way.
Speaker 1: Bill, Can you answer a question that I'm sure a
Speaker 1: lot of people have who saw your work in the
Speaker 1: White House, who saw your work for the Trump administration.
Speaker 1: After all, you helped shepherd the Genius Act and then
Speaker 1: you joined this company. How can you ensure viewers, listeners,
Speaker 1: competitors that there is no conflict of interest between you
Speaker 1: and what is happening right now at the White House.
Speaker 5: Well, look, you know, I've stepped down from my roles
Speaker 5: touching anything related to crypto in the White House, and
Speaker 5: you know, I felt like this was a fantastic opportunity
Speaker 5: to jump into the private sector and do exactly what
Speaker 5: the Genius Act intended to do, which was unsure the
Speaker 5: best developed in the space on shore, the brightest minds in.
Speaker 2: Crypto, and make the US the crypto capital of the world.
Speaker 5: Tether is by far and away the most important private
Speaker 5: public partnership the US government has. We're buying more treasuries
Speaker 5: than anyone else in the private sector. It makes us
Speaker 5: less reliant on foreign adversaries in order to purchase our debt.
Speaker 2: But also you can't be the crypto capital of.
Speaker 5: The world without having the most important company in the
Speaker 5: space here on US soil. And so that's what I've
Speaker 5: had an opportunity to do, and I'm extremely excited about it.
Speaker 1: Can you talk to us a little bit about how
Speaker 1: this role came together and when you started conversations with
Speaker 1: Paolo or the other folks over at tether.
Speaker 5: Well, look, you know I had been in conversations with
Speaker 5: everyone in the industry over the course of the last
Speaker 5: eight months as we worked diligently on Genius to make
Speaker 5: sure it was the best product for the American people.
Speaker 5: And you know, it took my job very seriously in
Speaker 5: that way. We wanted diversity of thought. We wanted to
Speaker 5: hear from the entire ecosystem before we developed the product
Speaker 5: that would upend the financial system in a positive way.
Speaker 2: And that's what we've done.
Speaker 5: And so you know, when I announced that I was resigning,
Speaker 5: I had received countless first from different firms. And again
Speaker 5: I'll point back to my prior comment. When I was
Speaker 5: looking at different opportunities, I said, well, hey, look, I
Speaker 5: have an opportunity now to do something that you know,
Speaker 5: I described as being extremely important when I was in
Speaker 5: my role, and that was on shore the most important
Speaker 5: players in the space.
Speaker 2: And that's what we're doing here at USAT.
Speaker 5: They're going to have a US entity based in Chrowot
Speaker 5: at North Carolina, which is where I'm from, which certainly
Speaker 5: made it distractive. And then we also have a US
Speaker 5: product that I think which will be by far and
Speaker 5: away the premiere product in the stable coin market here
Speaker 5: on US soil.
Speaker 1: So we don't have a ton of time. I want
Speaker 1: to jump in, and then I know Scarlett has some
Speaker 1: more questions. Were you Were you talking about this role
Speaker 1: while you were still employed at the White House.
Speaker 2: No, I was not.
Speaker 5: I was actually engaging with several different folks, just focused
Speaker 5: on the Digital Assets Working Group report at that time,
Speaker 5: and then obviously we got into August resigned for my role.
Speaker 5: I had several interviews in which I said I was
Speaker 5: courting I was being courted by several different firms and
Speaker 5: receiving many different offers. I went through those offers and
Speaker 5: talked about those with my family and then decided this
Speaker 5: was the best place for me to builder Bille.
Speaker 2: Thank you for answering that.
Speaker 4: Bo Paulo, let me ask you a final question. You
Speaker 4: have repeatedly said that Tether is not interested in going public.
Speaker 4: We started the show by talking about a couple of
Speaker 4: crypto companies have gone public and are doing well. Both
Speaker 4: plans to dominate means there's going to be a lot
Speaker 4: of need for money. What might change your mind ongoing public.
Speaker 3: Well, I think that the beauty of Tether is that
Speaker 3: has three features that most of the company don't have.
Speaker 3: So companies you should have in general a good ETOs
Speaker 3: and good philosophy. They should have the ability to innovate
Speaker 3: in our case innovating tech and finance. And also should
Speaker 3: have the capital. Most of the companies in the world,
Speaker 3: if not all the companies in the world, have either
Speaker 3: a good philosophy or have good tech innovation ability or
Speaker 3: both of them, but they lack capital. Tether last year
Speaker 3: made thirteen point seven billion dollars in profit not revenues profits,
Speaker 3: and this year I would be surprised if we don't
Speaker 3: top that. And so that is exactly even if you
Speaker 3: look at our competitors status, exactly what different sihates out.
Speaker 2: We have the entire.
Speaker 3: Ground based covered with you know, also our ability to
Speaker 3: generate enormous amount of capital and the profits and we
Speaker 3: invest them in infrastructure and expansion and distribution. In the
Speaker 3: last three years that are invested almost five billion dollars
Speaker 3: in the US market alone, and you know a lot
Speaker 3: also if we think about the global markets, we invest
Speaker 3: in different technologies. Of course, in different sectors, but the
Speaker 3: most importantly we invest in our distribution channels. Investment in
Speaker 3: rambo is one, but we invest in chains of the
Speaker 3: bodegas in Central South America. We invest in companies that
Speaker 3: are building hundreds thousands shots in the next five years
Speaker 3: in Africa to build again or even there in the
Speaker 3: most difficult market in the world, the biggest distribution network
Speaker 3: of physical distribution network for.
Speaker 2: The emerging market.
Speaker 3: So that is what we are set to do, and
Speaker 3: we have all the capital to do so we can
Speaker 3: remain the dependent. I don't want to spend the next
Speaker 3: three months and every single quarter of my life to
Speaker 3: try to explain to analysts why we are not optimizing
Speaker 3: to make two cents more rather than focusing on making good.
Speaker 2: In the world.
Speaker 1: Oh guys, really appreciate you both taking the time and
Speaker 1: joining us on Bloomberg Crypto today. Let's stay in touch
Speaker 1: and come back soon. That's Tether CEO Paolo Ardoino and
Speaker 1: bo Hines.
Speaker 2: Thanks for your time.