WEBVTT - Tether's CEO Speaks on His Insanely Profitable Business 0:00:02.720 --> 0:00:13.960 Bloomberg Audio Studios, Podcasts, radio News. 0:00:18.640 --> 0:00:21.840 Hello and welcome to another episode of the Odd Thoughts podcast. 0:00:22.040 --> 0:00:23.480 I'm Tracy Alloway. 0:00:23.160 --> 0:00:23.880 And I'm Joey. 0:00:23.920 --> 0:00:24.960 Isn't thal Joe? 0:00:25.000 --> 0:00:26.960 It is April here in New York. 0:00:27.000 --> 0:00:27.479 That's right. 0:00:27.880 --> 0:00:31.840 It is my ten year anniversary at Bloomberg this month. 0:00:32.120 --> 0:00:32.640 This month. 0:00:32.880 --> 0:00:34.880 Oh, that's awesome. You're going to get a pilon. 0:00:34.960 --> 0:00:35.360 That's great. 0:00:35.760 --> 0:00:38.200 It's put me in a very thoughtful mood a whole 0:00:38.240 --> 0:00:42.600 decade since Joe tricked slash enticed me into coming here. 0:00:43.040 --> 0:00:43.440 So thank you. 0:00:43.680 --> 0:00:44.200 Are you're happy? 0:00:44.400 --> 0:00:45.919 Are you happy about how it worked out? 0:00:46.040 --> 0:00:49.320 I I can't complain. I will say it was a 0:00:49.320 --> 0:00:51.599 bit rocky in the beginning, but we worked it out 0:00:51.800 --> 0:00:55.920 where going okay. In that ten years, a lot of 0:00:56.040 --> 0:01:01.800 things that I would never have expected to happen have happened, Yes, 0:01:01.960 --> 0:01:05.280 go on. One of them is the phenomenal growth of 0:01:05.319 --> 0:01:08.839 the crypto industry. So I first started writing about bitcoin 0:01:09.000 --> 0:01:13.039 in twenty eleven, and I will openly admit that I 0:01:13.080 --> 0:01:16.679 think by like twenty thirteen, I had written I think 0:01:16.760 --> 0:01:19.800 like three or four obituaries for bitcoin as well, So 0:01:20.000 --> 0:01:22.440 you know I got that wrong clearly. But one of 0:01:22.440 --> 0:01:25.280 the other things I got wrong on crypto is the 0:01:25.360 --> 0:01:29.240 phenomenal growth of stable coins. Yeah, so you look at 0:01:29.280 --> 0:01:33.479 something like Tether, the world's biggest stable coin. We talk 0:01:33.560 --> 0:01:37.160 about it in the same sentence nowadays as euro dollars, 0:01:37.360 --> 0:01:40.840 for instance, and the company itself is this huge player 0:01:41.040 --> 0:01:45.080 in financial markets, like it owns more t bills nowadays 0:01:45.120 --> 0:01:47.880 than some countries, which is all pretty amazing. 0:01:48.120 --> 0:01:51.240 Well, let's be honest for a second here. You know, 0:01:51.360 --> 0:01:53.360 you might have thought that Tether wouldn't even exist at 0:01:53.360 --> 0:01:56.680 this point because it had a reputation for years and years, 0:01:56.680 --> 0:01:59.040 like there are a bunch of scammers. They can't pass 0:01:59.080 --> 0:02:01.000 an audit, the money is there, et cetera. It's going 0:02:01.080 --> 0:02:02.640 to go away. Why would you ever hold it Tether? 0:02:02.760 --> 0:02:05.080 We have Sam bankman fried that years ago. Why would 0:02:05.120 --> 0:02:06.800 you hold Itchether when there are other companies that have 0:02:06.880 --> 0:02:09.600 done audits, et cetera. There are many people not only 0:02:09.680 --> 0:02:12.800 setting aside the size, setting aside all of the assets 0:02:12.840 --> 0:02:15.280 that it owned the back, you know the world's most 0:02:15.280 --> 0:02:17.799 popular stable coin. There are many people who just thought 0:02:17.880 --> 0:02:19.840 of this company can't continue so totally. 0:02:19.840 --> 0:02:22.120 The other thing I thought was that US officials were 0:02:22.120 --> 0:02:25.120 never going to grow comfortable with the idea of a 0:02:25.200 --> 0:02:29.240 loosely regulated foreign company creating synthetic dollars. But you know, 0:02:29.320 --> 0:02:32.720 the Trump administration seems to have some other ideas, so 0:02:33.360 --> 0:02:34.320 we should talk about all that. 0:02:34.360 --> 0:02:34.800 Let's do it. 0:02:34.919 --> 0:02:35.800 You'k a perfect guest. 0:02:35.880 --> 0:02:37.600 We do have the perfect guest. We're going to be 0:02:37.600 --> 0:02:41.160 speaking with Tether CEO, Paolo our do we know he is, 0:02:41.200 --> 0:02:44.320 of course the head of the world's largest stable coin. 0:02:44.400 --> 0:02:46.440 So Paolo, thank you so much for coming on the show. 0:02:46.760 --> 0:02:49.000 Thank you for having me. I'm very excited to be 0:02:49.040 --> 0:02:49.560 here today. 0:02:50.280 --> 0:02:54.119 So just to begin, has Tether's growth surprised you? Did 0:02:54.160 --> 0:02:57.480 you ever expect to ramp up to this degree? 0:02:58.040 --> 0:03:02.920 So I joined Tether very early, was early twenty fifteen, 0:03:03.040 --> 0:03:05.520 just after a couple of months that was actually created, 0:03:06.120 --> 0:03:10.680 and we were discussing internally, myself and Giancarlo, and we 0:03:10.680 --> 0:03:14.359 were asking ourselves the biggest number we could think about 0:03:14.360 --> 0:03:17.280 in terms of growth and projection of growth of our 0:03:17.360 --> 0:03:22.000 stable coin was between one hundred million dollars and one 0:03:22.000 --> 0:03:25.240 billion dollars, and now today is one hundred and forty 0:03:25.240 --> 0:03:29.040 four billion dollars in total issue tokens. So we are 0:03:29.600 --> 0:03:33.160 incredibly excited, we are impressed ourselves. But I must say 0:03:33.200 --> 0:03:36.520 that it's all happened organically over a decade. 0:03:37.360 --> 0:03:40.160 The stable coin business is so sick, it seems to 0:03:40.200 --> 0:03:42.760 me right, because you hold all of these assets that 0:03:42.880 --> 0:03:46.440 back one to one, these tokens that move on blockchains, 0:03:46.760 --> 0:03:50.120 and you collect all this interest and the holders of 0:03:50.160 --> 0:03:53.640 the coins don't collect any interest. According to a release 0:03:53.840 --> 0:03:58.040 on Tether's on website, you made thirteen billion dollars in 0:03:58.160 --> 0:04:02.320 twenty twenty four. Various estimate have your total employees somewhere 0:04:02.320 --> 0:04:05.240 a little bit below two hundred, so that makes per 0:04:05.280 --> 0:04:09.320 profit employees somewhere close to ninety million per employee. Like, 0:04:09.560 --> 0:04:11.880 there's basically correct math that this is like one of 0:04:11.960 --> 0:04:15.720 the most extraordinary, maybe the most profitable business in the 0:04:15.760 --> 0:04:16.680 history of business. 0:04:16.920 --> 0:04:21.240 Yeah, I think it's definitely extraordinary. I define TETA at 0:04:21.279 --> 0:04:25.240 once in a century company because of the capital that 0:04:25.279 --> 0:04:27.800 we have given our profits. In the last two years 0:04:27.839 --> 0:04:31.080 and a half, we made around twenty billion in profits, 0:04:31.520 --> 0:04:34.840 and we almost distributed well, we distributed a very very 0:04:34.839 --> 0:04:39.320 tiny part to their shareholders. I mean a name, another company, 0:04:39.360 --> 0:04:43.000 another fund or whatever that distributed less than I know, 0:04:43.040 --> 0:04:45.840 ten percent or probably even less than five percent of 0:04:46.120 --> 0:04:49.320 profits to their own their own shareholders. So that is 0:04:49.360 --> 0:04:53.080 something that is unprecedented and it's you know, it's set 0:04:53.200 --> 0:04:56.159 in TET to be able to reinvest ninety five percent 0:04:56.160 --> 0:04:59.719 of its profits in keeping growing its distribution network for 0:04:59.800 --> 0:05:02.800 the US dollar and also investing in other pretty cool 0:05:02.839 --> 0:05:05.880 things from artificial intelligence, bigon mining, and the tens of 0:05:05.880 --> 0:05:07.520 other opportunities around the world. 0:05:07.839 --> 0:05:12.039 So you mentioned distribution of the US dollar, and there 0:05:12.120 --> 0:05:15.040 is some tension there right. I mentioned earlier that I 0:05:15.080 --> 0:05:18.279 never thought regulators were going to be okay with someone 0:05:18.360 --> 0:05:22.520 basically creating a synthetic dollar that can trade around the world. 0:05:22.960 --> 0:05:26.680 But times have changed and some things are shifting on 0:05:26.720 --> 0:05:30.479 the regulatory front. But are you a competitor to the 0:05:30.600 --> 0:05:33.320 US dollar? Plenty of people would say you are, or 0:05:33.400 --> 0:05:35.920 are you something that perhaps complements it. 0:05:36.680 --> 0:05:39.159 I don't think we are a competitor to the US dollar. 0:05:39.640 --> 0:05:44.840 USDT is a digital dollar that is backed for most 0:05:44.839 --> 0:05:48.679 of it by US treasuries. We are bringing the US 0:05:48.680 --> 0:05:51.640 dollar out there in the emerging markets to developing countries. 0:05:52.279 --> 0:05:56.360 We have as of today more than four hundred million users, 0:05:56.480 --> 0:05:59.400 actually will be five hundred and fifty million users. I'd 0:05:59.440 --> 0:06:02.080 like to be a bit more conservative to avoid double 0:06:02.120 --> 0:06:05.200 counting users, so I would say more than four million users. 0:06:05.600 --> 0:06:08.920 We grow at the pace of thirty million new users 0:06:08.960 --> 0:06:11.800 per quarter. That is again, we are not Facebook. We 0:06:11.839 --> 0:06:15.800 are just a digital dollar. So it's really unprecedented and staggering. 0:06:16.279 --> 0:06:20.200 The reason why we are interesting for the United States 0:06:20.240 --> 0:06:23.120 and the regulators are now appreciating who we are and 0:06:23.160 --> 0:06:25.880 what we are doing is the fact that we have 0:06:26.000 --> 0:06:28.880 been building the biggest distribution actor for US dollar in 0:06:28.920 --> 0:06:31.360 a physical form and a digital form. We have millions 0:06:31.400 --> 0:06:34.640 of touch points around the world in the emerging market. 0:06:35.000 --> 0:06:39.280 We never approached our distribution going through institutions in the 0:06:39.279 --> 0:06:43.760 emerging markets, but we build physically infrastructure from chosts in 0:06:43.839 --> 0:06:48.120 villages in Africa to bodegas in southern South America. And 0:06:48.160 --> 0:06:53.080 again we are just distributing a digital dollar. And look, 0:06:53.200 --> 0:06:57.920 the reality is that the US dollar hegemony is very, 0:06:58.000 --> 0:07:01.200 very important for United States. And when we are in Africa, 0:07:01.279 --> 0:07:03.279 when we're in Central South America, there is not much 0:07:03.400 --> 0:07:06.760 US presence. There is actually there is press and apart 0:07:06.920 --> 0:07:10.840 maybe McDonald's, but in some countries in Central South America, 0:07:11.560 --> 0:07:14.640 the actual presence of infrastructure in the United States is 0:07:14.720 --> 0:07:18.480 not there. So what Tata is doing in those countries 0:07:18.640 --> 0:07:23.160 is purely building that infrastructure and trying to in a 0:07:23.160 --> 0:07:25.440 way combat Actually more than in a way, it's we 0:07:25.560 --> 0:07:30.040 are i think, the last stronghold before the very strong 0:07:30.160 --> 0:07:34.440 push towards diedalarization made by the bricks countries. So we see, 0:07:34.440 --> 0:07:36.960 for example that in Central South America or in Africa, 0:07:37.040 --> 0:07:42.840 there are hospital, schools, libraries, and airports that are building 0:07:42.960 --> 0:07:46.440 the built by China. And again there is an interest 0:07:46.440 --> 0:07:49.320 from breeks countries to launch a digital currency backed by 0:07:49.360 --> 0:07:53.000 gold plus. There are building an infrastructure in these countries, 0:07:53.280 --> 0:07:56.000 So all the employees, all the people that will rotate 0:07:56.320 --> 0:08:00.680 and gravitate around these new infrastructures built by bridge countries, 0:08:01.120 --> 0:08:03.920 we'll start using something that is not the US dollars. 0:08:04.000 --> 0:08:07.040 So I think it's becoming very very clear that actually 0:08:07.160 --> 0:08:09.600 Tatter is the best of life for the United States. 0:08:09.880 --> 0:08:12.880 Is the company when we are also in these countries. 0:08:12.920 --> 0:08:15.440 We are not seeing NGOs, we are not seeing charities. 0:08:15.520 --> 0:08:18.320 We are the company that also solved or is solving 0:08:18.360 --> 0:08:20.880 financial inclusion in the strongest way possible. 0:08:21.320 --> 0:08:23.680 Joe I got to say, it's a little bit depressing 0:08:23.800 --> 0:08:26.360 that you know, a company that was founded by an 0:08:26.360 --> 0:08:30.240 Italian in Europe incorporated in the BVII. Although I think 0:08:30.240 --> 0:08:35.240 you're moving to El Salvador is the ambassador for US. 0:08:36.840 --> 0:08:39.960 Against the end of the dollar. Well, history can be 0:08:40.040 --> 0:08:43.640 funny in that respect. Why haven't you ever been audited. 0:08:44.120 --> 0:08:47.680 So in the past administered with the past administration last 0:08:47.760 --> 0:08:51.240 four years, I must say that was not easy to 0:08:52.000 --> 0:08:57.439 deal with the past again administration. So I remember Senator 0:08:57.480 --> 0:09:03.560 Warren sending letters around to different organizations. There was a 0:09:03.600 --> 0:09:06.839 case of the Operation Truck point two point zero that 0:09:07.280 --> 0:09:11.520 was very aggressive towards the banking industry that was supporting 0:09:11.520 --> 0:09:16.440 cryptocurrency companies. On the other side, that letter also scared 0:09:16.440 --> 0:09:20.640 away and was targeted towards the Big four auditing firms 0:09:20.679 --> 0:09:24.320 and other auditors. That where then this incentivized to go 0:09:24.440 --> 0:09:27.560 against the will, the strong will of an administration that 0:09:27.760 --> 0:09:29.360 was really against crypto in general. 0:09:30.120 --> 0:09:33.560 Just real quickly. So obviously you hold your money or 0:09:33.640 --> 0:09:36.400 a lot of your the assets the holder with counter Fitzgerald, 0:09:36.440 --> 0:09:39.559 It's former CEO, Howard luck Nick now the Commerce secretary 0:09:40.000 --> 0:09:43.040 friendly with the administration. There has been this changing of 0:09:43.080 --> 0:09:46.600 the guard. Has the changing of the guard at the 0:09:46.679 --> 0:09:51.280 administration level had any bearing on the reason that you're 0:09:51.320 --> 0:09:53.880 here in New York City and comfortable visiting the US. 0:09:54.440 --> 0:09:58.120 So I was been always comfortable to visit the US, 0:09:58.120 --> 0:10:01.439 but you won't usually to go where what you are 0:10:01.480 --> 0:10:04.680 doing for ninety seven percent of your time or eighty 0:10:04.679 --> 0:10:07.200 percent of your time given sleep in a few hours 0:10:07.800 --> 0:10:10.640 is being accepted and is not considered a very bad 0:10:10.720 --> 0:10:13.120 thing by the administration. Right, So you want to deal 0:10:13.160 --> 0:10:16.120 with people that support what you're doing. It at least 0:10:16.200 --> 0:10:18.520 they have the will to understand what you're doing. So 0:10:18.880 --> 0:10:22.319 actually the change in administration is what is making possible 0:10:22.559 --> 0:10:27.479 for us for that or another many cryptocurrency related companies 0:10:28.040 --> 0:10:30.920 to start to deal with the big four auditing firms. 0:10:31.160 --> 0:10:34.600 We are in discussions. We have multiple discussions on the 0:10:34.640 --> 0:10:37.280 topic of audit. We hired a new CFO a couple 0:10:37.320 --> 0:10:41.679 of months ago. Is great. Simon went through multiple contentions 0:10:41.760 --> 0:10:45.200 full audit across his entire career. I don't think that 0:10:45.280 --> 0:10:48.600 audit should be contentious, but given again the complexity and 0:10:48.760 --> 0:10:53.439 the new field that is cryptoward is possibly one correct 0:10:53.520 --> 0:10:57.760 term and adjective that I could use here. And look, 0:10:57.840 --> 0:11:00.400 we are very positive that the full audit is our 0:11:00.440 --> 0:11:04.240 top priority, and I'm pretty confident that we're going to 0:11:04.240 --> 0:11:04.600 make it. 0:11:05.120 --> 0:11:08.760 So just to be clear on the regulatory point, things 0:11:08.800 --> 0:11:12.360 are changing, as you just mentioned, and previously there was 0:11:12.440 --> 0:11:16.320 regulatory pressure on the big accounting firms to not work 0:11:16.360 --> 0:11:20.560 with you. That seems to be going away. That's going 0:11:20.640 --> 0:11:22.679 to allow you to do an audit. Do you have 0:11:22.720 --> 0:11:24.520 a time frame for when you might do that? 0:11:25.200 --> 0:11:27.800 So in the past we committed a few times and 0:11:27.920 --> 0:11:31.880 we provided timelines that were not realistic because of the 0:11:31.920 --> 0:11:36.360 fact that, as I said, the administration really doubled down 0:11:36.360 --> 0:11:39.040 on trying to kill an entire industry. That was very, 0:11:39.160 --> 0:11:42.920 very sad to see. So again, we are moving as 0:11:42.920 --> 0:11:46.840 fast as we can. There is of course some change 0:11:46.880 --> 0:11:50.160 that is still needed among the big four auditing firms. 0:11:50.679 --> 0:11:54.080 So while they are getting more comfortable, look the administration 0:11:54.200 --> 0:11:57.080 changed only two months ago, so give them a little 0:11:57.080 --> 0:11:59.560 bit of time to get comfortable. And we are providing 0:11:59.640 --> 0:12:02.960 all the We are again in already in discussions. So 0:12:03.200 --> 0:12:06.320 it's crazy. The monimization changed two months ago and we 0:12:06.440 --> 0:12:09.280 are already in discussions way big four auditing firms. So 0:12:09.679 --> 0:12:11.920 that is the best thing that can say. And again 0:12:11.960 --> 0:12:14.959 the fact that we hire the new CFO and that 0:12:15.080 --> 0:12:17.280 has you know, the highest experience in the sector to 0:12:17.320 --> 0:12:21.040 get through audits is something that should reinvigorate our position. 0:12:36.240 --> 0:12:39.439 What's the complexity of doing an audit for a business 0:12:39.559 --> 0:12:41.880 like Tether. I've always wanted to ask this question. So 0:12:42.040 --> 0:12:44.960 you know, you need a professional accounting firm to do this, 0:12:45.080 --> 0:12:48.800 because you want to give people who use Tether investors 0:12:48.840 --> 0:12:52.640 some sense of safety and stability and truth in what 0:12:52.679 --> 0:12:56.680 you're portraying. But at the same time, it seems like, 0:12:57.040 --> 0:12:58.800 you know, you should have a pretty good idea. 0:12:58.920 --> 0:13:01.560 It seems simple, count of the treasuries and count the 0:13:01.559 --> 0:13:03.600 circuits and if they merge, what are we missing here? 0:13:03.800 --> 0:13:05.840 I agree with that. In fact, the problem I don't 0:13:05.880 --> 0:13:10.040 think is about the complexity of going through our reserves 0:13:10.040 --> 0:13:13.319 because as we said, we keep the majority, the vast 0:13:13.360 --> 0:13:15.760 majority of our treasure is in counterfigial. That is a 0:13:15.880 --> 0:13:19.679 very highly regulated financial institution here in the US. I 0:13:19.720 --> 0:13:23.760 think that the confidence in the industry, in the digital 0:13:23.760 --> 0:13:27.120 assets industry is growing among the big four auditing firms. 0:13:27.520 --> 0:13:29.440 And look, on the other side, you can go on 0:13:29.520 --> 0:13:32.199 blockchains and blockchains are very very transparent, so you can 0:13:32.240 --> 0:13:35.120 count to the liabilities through the transparency of the blockchain. 0:13:35.240 --> 0:13:37.880 And on the other side, you can just independently contact 0:13:38.000 --> 0:13:41.800 our custodians. I think that what we expect from the 0:13:41.840 --> 0:13:45.400 full audit is also confirmation of our good practices that 0:13:45.440 --> 0:13:48.360 we have within the company in terms of controls and 0:13:48.440 --> 0:13:51.840 safety and proper management, for example, the private keys and 0:13:51.880 --> 0:13:55.200 all that stuff. So that's a process that we want 0:13:55.280 --> 0:13:57.640 to make sure that we go in the deepest details 0:13:57.640 --> 0:14:01.080 possible with our auditors, because there is nothing that excites 0:14:01.160 --> 0:14:04.400 me more than prove that we were always right we 0:14:04.559 --> 0:14:07.480 had our lacking in twenty twenty four going out there 0:14:07.520 --> 0:14:11.280 saying Tatter has the money. We are releasing a quarterly 0:14:11.280 --> 0:14:15.679 attestation from a very reputable auditing firm called BDO. They 0:14:15.679 --> 0:14:20.800 are international, so there are many many different independent validators 0:14:20.840 --> 0:14:23.480 of our service. But you know, we just want to 0:14:23.480 --> 0:14:24.600 get the flow of it done. 0:14:24.840 --> 0:14:28.400 Circle, one of your competitors, holds its money in a 0:14:28.440 --> 0:14:32.320 money market mutual fund from Blackrock called the Circle Reserve Fund. 0:14:32.680 --> 0:14:37.160 What is the advantage of going out and acquiring q 0:14:37.360 --> 0:14:40.720 SIPs of various flavors directly such that you're direct holder 0:14:40.720 --> 0:14:44.000 of treasuries rather than outsourcing it like that. Here's an 0:14:44.000 --> 0:14:46.760 institution black Rock. They set up a money market mutual 0:14:46.800 --> 0:14:48.480 fund that you could just buy into and not have 0:14:48.520 --> 0:14:51.520 to think about that part. Why the preference towards the 0:14:51.600 --> 0:14:54.000 direct holdings of the bills and bonds. 0:14:54.560 --> 0:14:56.880 So that's a good question. So we prefer to have 0:14:57.000 --> 0:15:01.320 a direct control over the process and we that through Counterfaitgerald. 0:15:01.600 --> 0:15:05.000 Also having that direct control allows us to have access 0:15:05.080 --> 0:15:08.920 to the infinitely liquid ripple market. So we think that 0:15:09.080 --> 0:15:12.920 is in case of huge pressure from the markets and 0:15:13.000 --> 0:15:17.360 huge redemption pressure, our facility is much better than anything 0:15:17.360 --> 0:15:21.560 else attempted by our competitors. Look think about in twenty 0:15:21.760 --> 0:15:25.160 twenty three, our major competitors had and a big issue 0:15:25.200 --> 0:15:28.080 with Silicon Valley Bank. They have uninsured cash deposits there. 0:15:28.240 --> 0:15:32.520 In twenty twenty two, Tetter was attacked by funds that 0:15:32.600 --> 0:15:36.600 were clearly trying to cause a bank run on USDT. 0:15:37.200 --> 0:15:41.240 They tried the mussed billions and billions and billions of 0:15:41.560 --> 0:15:44.880 USDT just to trying to sell them under par on 0:15:44.920 --> 0:15:48.800 the secondary markets on the different cryptocurrency exchanges can Tetther 0:15:49.000 --> 0:15:52.320 never refused the redemption. TATA never failed to redeem at 0:15:52.440 --> 0:15:57.400 one dollar each token. But at that time when that happened, 0:15:57.760 --> 0:16:01.000 these short sellers were trying to cause a bankrupt and 0:16:01.040 --> 0:16:03.280 So what happened is that Tata was able to redeem 0:16:03.360 --> 0:16:06.880 seven billion dollars in forty eight hours and the twenty 0:16:06.920 --> 0:16:10.320 billion dollars in twenty five days. So seven billion dollars 0:16:10.360 --> 0:16:14.320 weigh ten percent of our reserves and twenty billion dollars 0:16:14.400 --> 0:16:18.680 where around the twenty something percent of our reserves. So 0:16:19.280 --> 0:16:22.280 I mean, if you look at Washington, mood Well and 0:16:22.360 --> 0:16:26.240 many other banks that failed from twenty eight and after, 0:16:26.840 --> 0:16:29.000 there was no bank that was able to support a 0:16:29.040 --> 0:16:31.640 ten percent bankrunt, and we did it with flying collars. 0:16:31.640 --> 0:16:34.760 We could have gone to till the end. That's what 0:16:35.280 --> 0:16:38.000 means to have a proper repo market and very deep 0:16:38.120 --> 0:16:41.920 liquid market for treasuries. We keep all treasuries that are 0:16:41.960 --> 0:16:46.040 basically three months in duration ninety days. So I think 0:16:46.120 --> 0:16:49.720 we build the best facility for handling any sort of 0:16:49.760 --> 0:16:52.880 redemption and provide the proper amount of trust that our 0:16:52.960 --> 0:16:54.200 users need around the world. 0:16:54.680 --> 0:16:57.880 So you made it through twenty twenty two, it must 0:16:57.920 --> 0:17:01.680 have still been fairly traumatized or scary at the time 0:17:01.800 --> 0:17:04.960 to have that much withdrawal pressure on the business. Have 0:17:05.080 --> 0:17:09.520 you changed any of your redemption policies since then or 0:17:09.600 --> 0:17:14.640 perhaps instituted I don't know new risk management around the 0:17:14.680 --> 0:17:15.679 PEG point. 0:17:16.680 --> 0:17:20.000 So the concept of PEG is interesting, right. People refer 0:17:20.119 --> 0:17:23.760 to the PEG as you know, if USDT or another 0:17:23.800 --> 0:17:27.560 stable coin trades you know, two, three business points or 0:17:27.560 --> 0:17:32.000 ten business points below one dollar on secondary markets, that 0:17:32.240 --> 0:17:35.520 is not the PEG. The PEG is our ability. The 0:17:35.560 --> 0:17:40.040 official PEG of USDT is our ability to redeem every 0:17:40.119 --> 0:17:43.040 token that can be sent to our primary market, that 0:17:43.160 --> 0:17:47.200 is our platform, to one dollar. So we always redeem 0:17:47.480 --> 0:17:51.119 every single token at one dollar. So if someone on 0:17:51.200 --> 0:17:53.440 the secondary market is trying to short it and sell 0:17:53.480 --> 0:17:56.159 it to one percent two percent under power, that is 0:17:56.200 --> 0:17:58.920 a completely different thing. It does not mean that there 0:17:58.960 --> 0:18:01.639 is an actual issue. In fact, we demonstrated that we 0:18:01.640 --> 0:18:04.320 were able. Even when we were attacked in a very 0:18:04.320 --> 0:18:06.760 heavy way that would have destroyed every single company and 0:18:06.800 --> 0:18:10.119 every single financial institution in this world. We survived and 0:18:10.280 --> 0:18:13.600 very well. So actually we have still PTSD, I must 0:18:13.600 --> 0:18:17.560 say after that event. But I think that really reinforced 0:18:17.840 --> 0:18:22.600 our commitment to transparency. It's funny because first we were 0:18:22.640 --> 0:18:25.360 accused to not be transparent enough, and then when we're 0:18:25.400 --> 0:18:27.600 now very transparent and we are also saying how much 0:18:27.600 --> 0:18:29.879 money we are making, people get upset because we are 0:18:29.920 --> 0:18:32.800 making too much money. So it's quite interesting how it 0:18:32.840 --> 0:18:35.800 can go both ways. But look now, I think that 0:18:35.840 --> 0:18:37.879 there is no doubt that the Tator has in this 0:18:38.000 --> 0:18:41.879 moment one hundred and forty four billion dollars in issued outstanding 0:18:41.920 --> 0:18:45.160 tokens and around one hundred and sixty four billion dollars 0:18:45.200 --> 0:18:49.399 in excess equity across the group. So it's something. So 0:18:49.480 --> 0:18:54.160 we have twenty billion dollars in proprietary capital within the company, 0:18:54.600 --> 0:18:58.119 among which seven are specific seven billion are specifically to 0:18:58.200 --> 0:19:02.440 let us at last attestation, where specifically are specifically attributed 0:19:02.480 --> 0:19:05.120 to the access research of the stable coin. By again, 0:19:05.200 --> 0:19:07.600 the group has twenty billion dollars in additional equity. So 0:19:07.880 --> 0:19:10.159 it's very rare that you see a company like this, 0:19:10.359 --> 0:19:14.080 and so yes, we want also the fact that we 0:19:14.200 --> 0:19:17.679 basically took out very small amount of dividends prove the 0:19:17.720 --> 0:19:20.119 fact that for us, the safety of our ecosystem, the 0:19:20.119 --> 0:19:23.200 safety of our company is paramount. And if you look 0:19:23.240 --> 0:19:26.360 at our other competitors to keep you know, some peanuts 0:19:26.400 --> 0:19:28.040 on top of the reserves. 0:19:27.640 --> 0:19:30.639 You mentioned, people complain about, oh, you're making so much money, 0:19:30.680 --> 0:19:32.399 and you know, look, people are always going to lie 0:19:32.480 --> 0:19:34.159 about other people doing well, I get that, but I 0:19:34.160 --> 0:19:37.800 can think of one group that might genuinely have an 0:19:37.840 --> 0:19:42.040 eye on the profits, and that is institutional traders of crypto. 0:19:42.320 --> 0:19:45.200 And the question I have is, you have this amazing 0:19:45.280 --> 0:19:47.880 business model. Will you collect all this yield on your 0:19:47.880 --> 0:19:51.200 treasuries and none of it remits? And how long can 0:19:51.240 --> 0:19:54.120 that last? Because I would imagine that if I were 0:19:54.240 --> 0:19:56.680 some hedge fund, or if I were some highest frequency 0:19:56.720 --> 0:19:59.919 trading shop, et cetera, I would not want to be 0:20:00.160 --> 0:20:03.080 holding this token. If I were holding a dollar, you know, 0:20:03.160 --> 0:20:05.439 even for a minute, I would put it in some 0:20:05.480 --> 0:20:07.960 sort of money market virtual front, collected day's worth of 0:20:08.000 --> 0:20:10.639 yield whatever. You're not gonna leave that in a non 0:20:10.680 --> 0:20:14.080 interest bearing asset even for ten seconds. Do you believe 0:20:14.119 --> 0:20:17.280 that the business model, the margin between holdings what you 0:20:17.320 --> 0:20:20.520 pay out, can sustain itself with competition or will it 0:20:20.600 --> 0:20:22.080 inevitably compress? 0:20:22.600 --> 0:20:25.000 So you make a very good point, but I think 0:20:25.040 --> 0:20:28.240 that they should. There is that you would be right 0:20:28.440 --> 0:20:31.520 if stable coins in general would be a product made 0:20:31.520 --> 0:20:34.920 for the United States. Stable coins are not a product 0:20:34.920 --> 0:20:37.600 made for United States. Sure stable coins can work in 0:20:37.600 --> 0:20:40.760 the United States. Stable coin can be used as a 0:20:40.760 --> 0:20:46.480 faster settlement system across the inter banking settlement system. Materiality 0:20:46.600 --> 0:20:51.000 is that data never focused on institutions. You know, institutions 0:20:51.000 --> 0:20:54.760 would betray you for one basis point. They would would go, 0:20:54.920 --> 0:20:57.200 you know, they would do they want, as you said, 0:20:57.640 --> 0:21:00.320 to use money market funds to maximize their return. That 0:21:00.520 --> 0:21:03.920 is fair, that is normal. But so Tether build the 0:21:03.920 --> 0:21:06.919 biggest distribution network for US dollar in the emerging markets 0:21:06.920 --> 0:21:09.879 and developing countries where if you think about Turkey, if 0:21:09.920 --> 0:21:13.120 you think about Argentina, if you think about other countries, 0:21:13.760 --> 0:21:18.159 the national currency of these places have been devaluating very 0:21:18.200 --> 0:21:22.000 very fast against the US dollar. So in Argentina, I 0:21:22.040 --> 0:21:24.840 think that pays Argentina the last ten twelve years, they 0:21:24.880 --> 0:21:28.600 evaluated ninety eight percent against the US dollar, and the 0:21:28.600 --> 0:21:31.480 Turkish leer the evaluated eighty percent against the US dollar 0:21:31.520 --> 0:21:34.960 in the last a few years. So last year into. 0:21:34.680 --> 0:21:36.760 Those So you're saying that four percent doesn't. 0:21:36.560 --> 0:21:39.320 Matter, Yes, because the inter day volatility over their national 0:21:39.320 --> 0:21:41.879 currency is higher than four percent, So why does it 0:21:41.920 --> 0:21:44.240 matter to them? And that's they will stay with you. 0:21:44.280 --> 0:21:46.400 They will be loyal will you as long as you 0:21:46.480 --> 0:21:49.000 can prove them that you have the solid product that 0:21:49.040 --> 0:21:51.840 can trust for their family savings. And by the way, 0:21:51.880 --> 0:21:54.960 forty percent of all the USDT holders are using USDT 0:21:55.119 --> 0:21:59.080 for savings, so that because we have people that live 0:21:59.119 --> 0:22:01.639 in Nigeria and urgent markets that need that as a 0:22:01.640 --> 0:22:05.600 lifeline against the evaluation of their national currency and inflation 0:22:05.640 --> 0:22:06.280 in their countries. 0:22:06.800 --> 0:22:10.000 I take the point that tether is not necessarily aimed 0:22:10.200 --> 0:22:13.760 at the US, But at the same time, there are rumors. 0:22:13.800 --> 0:22:18.600 There are always rumors swirling around about big global companies 0:22:18.800 --> 0:22:23.680 like an Amazon, maybe a Walmart rolling out some sort 0:22:23.680 --> 0:22:27.760 of payment system, or maybe a stable coin competitor. And 0:22:27.840 --> 0:22:31.119 I think one interesting thing that's been happening lately is 0:22:31.160 --> 0:22:35.200