 If you see also the volumes of tether compared to the rest of stablecoins, that they are insanely higher. They are even 10 times higher on a bad day. This is Paolo Ardoino, the CTO of tether, the world's largest stablecoin issuer. Stablecoins, whose value is backed by real-world assets, are among the fastest growing cryptocurrencies. USDC, the second largest stablecoin, has been gaining market share and could threaten soon tether's dominance. USDC is not more regulated if an average TV is provided by the competition does not make it true. In this video, we talk about tether's key role in spreading crypto adoption. We also discuss how tether plans to keep its leading position in an increasingly competitive stablecoin market. I'm Giovanni, your host, and this is a Cointelegraph interview. So Paolo, let's talk about Plan B. Tether recently entered a partnership with the Swiss city of Lugano in order to make Bitcoin, tether and the local stablecoin Luga de facto legal tender in the city. So can you tell us a bit more about the project and what is the current status of it? So we are used to live in an industry that is the crypto industry that is really often abstract. We wanted, as tether and Bitfinex as a group of companies, we wanted to provide a first use case of a clear adoption of three of the, well, two of the most used cryptocurrencies in the world, Bitcoin and tether. And then, of course, the local stablecoin created by the city of Lugano. We wanted to show how using these three cryptos, the citizens could extremely benefit from, first of all, improvement in terms of accessibility to financial services and improvement in terms of reduction of transaction fees. We know that now the majority of payments are done through credit cards. And then these credit cards have a variable fee from 35% using stablecoins that fee could remain in the pockets of either the customer of the merchant or the merchant itself. So we wanted to actually build in an ecosystem in a contained environment because Lugano has 70,000 inhabitants. So it's a fairly contained environment. So we wanted to start from something we could, in a way, control that we could oversee to ensure that the adoption of these three cryptocurrencies would happen in the most organic way but with the highest quality. And so what can citizens of Lugano concretely do with cryptocurrency now? So the city is, so the administration of the city is working to allow the citizens to pay citizens and tourists. So the citizens to pay taxis and all the city services in the Luga, Tether, and Bitcoin. And of course, all the tourists that come and use the city services in stealing the three currencies. Of course, it will take a few weeks or a few months anyway in order to have all these new payment systems integrated into the city accounting. The second step is now nowadays there are already 200 merchants that are supporting Luga stablecoin and more than 100 that are also supporting Bitcoin payments already. So what will happen in the next months and we are already well had in working with different partners to provide, to create a simple offering for the merchants of the city to have a new point of sale system and that will accept both credit and debit cards but also crypto payments in the three currencies that we mentioned Bitcoin, Tether, and Luga stablecoin. This initiative reminds me of what happened in El Salvador last year where Bitcoin was accepted was adopted as legal tender by law. So that law was a bit controversial because essentially all merchants in the country were forced to accept Bitcoin if they were offered Bitcoin as a means of payment. As far as I understand in Lugano, it works differently. No, it is not. So as you said, there is a difference. This is in Lugano, there is a de facto legal tender in the sense that the city will support. So all the administration will support these three cryptocurrencies for all the city services and will help the education of the citizens and merchants to understand why is going to be extremely beneficial for them and in a way a no-brainer to adopt Bitcoin and Tether and Luga as payment systems. I believe that it's important to not force this thing through all the merchants. It's important that people have the choice and that they have the freedom of choice. The difference between Lugano and El Salvador is actually the population and the base wealth. Lugano is a rich city in Switzerland that is one of the richest countries, if not the richest country in the world. El Salvador is a country in Latin America that is not as rich and there is a percentage of unbanked that is extremely high. So Bitcoin for El Salvador is part of a primary infrastructure and financial infrastructure while Lugano is optional but is a benefit that could benefit for merchants that will potentially make more business. And that is completely fine, right? Different places, different use cases, Bitcoin is for everyone. So let's talk about Tether now, USDT is currently the world's largest stablecoin. However, USDC, Tether's main competitor, is quickly gaining market share. So the market cap of USDC stood at around $6 billion over a year ago while today it stands at around $51 billion. And according to arcane research, USDC would overtake Tether as the largest stablecoin in June if it continues growing at the same rate. So what do you think is the reason behind USDC's impressive growth and what is Tether's plan in order to maintain its dominance in the stablecoin market? So first of all, I have read the research but things change. Look at what happened the last 30 days. Tether grew almost 3.2 percent, USDC dropped 2.8 percent, something like that. So one month ago the discrepancy between Tether and USDC, your Tether USDT and USDC was $26 billion, nowadays is $31 billion. So actually in the last 30 days, Tether regained momentum. And you can see the reason I believe that Tether is growing so fast is that Tether is really perceived as an instrument of freedom, a solution, a tool that helps everyone. It's not a tool built for the banks. It's not a tool made for Wall Street. It's a tool that everyone, the last person can use, it's not made for the rich but it's made for young banks. It's made for people that have actual problems to access financial services. So again, as Tether we don't want to, we are not interested in going public. We are doing this because we believe that is going to be beneficial for billions of people. That is why if you see also the volumes of Tether compared to the rest of stable coins, that they are insanely higher. They are even 10 times higher on a bad day. So they are usually much higher than 10 times. So I personally don't care if we become the second biggest stable coins. I don't have that sense of pride in myself but I believe that Tether will continue to thrive over the next years just because it's useful, it's trusted and it's just proven by the use of people. So it must be said that USDC has built a reputation for being quite friendly with the US regulators while Tether has rather a patchy history when it comes to the transparency of its reserves. So do you think that might be the reason why people are increasingly turning to USDC because they feel more protected? No, I really don't say that so I'm sorry but on many fronts I believe that there is a big misconception here. First of all, USDC is not more regulated. We are regulated in the same way. We are both registered Vincent. We worked with law enforcement and I believe in the same way at least we know that the Tether is compliant and working really well with law enforcement and regulators across the world. We have been just named by Fitch that is a US company as the most transparent stable coin. So our reports are considered more transparent than the other competitors. And why is that is because starting from January 2021, we started providing the attestation, the quarterly attestations that also contain a breakdown reserves. We didn't have fear. We provided more information immediately to all our users. We provided that information that contained the breakdown reserves and also contained the famous commercial papers. And then people start asking about the commercial papers. And then we provided the breakdown of the ratings of the commercial paper. The ratings are provided by, so we take the lowest rating among Fitch, Moody's and the Southern Pours. And the vast majority of the commercial paper turned to be A2 or better. That is basically at the same level of the US Treasury. And then people still had questions. So we also decided to reduce the allocation of commercial papers to increase the Treasury allocation, all that said and demonstrated publicly. So I believe that, of course, there is an interest in our team from the competition. But that is that does not mean that if an average TV is provided by the competition does not make it true, I believe that we have demonstrated our transparency. It has been also suggested that our transparency was higher than the competition also by a big organization like Fitch. So I think that we as debtor in terms of transparency were in a really good shape. So now let's talk about CBDCs or central bank digital currencies. We are seeing that all over the world governments are developing this new technology that will allow basically national currencies to run on the blockchain and work in a similar way as stable coins do now. So when this new technology will be available to the masses, what will be the relevance for privately issued stable coins such as Tether? I believe that they will coexist with privately issued stable coins like Tether will coexist with CBDCs. The reason is that the standard of the traditional banking industry is relying on really outdated technology. So they are relying on technology that was built 30 years ago, even more is probably even older. They are still using like languages like COBOL and other stuff, right? The cost of maintaining that pooling infrastructure is enormous. So actually, imagine if you could use a blockchain to set to all the transactions across all the banks in a region. The cost of maintenance will go down by many orders of magnitude. The reason is because with blockchains, everyone is looking at the same number, at the same values, the same. So you can put all the transactions and all imagine if all the banks could run nodes, even on the private blockchain. The saving in terms of maintenance and the stability and security are scoring to be huge. So that's why I believe that CBDCs are interesting. I believe that although I believe that so CBDCs and the way they will work, I believe that will just replace the ACH or the SEPA or the SWIFT channels. So it's just another way to send wires with a different protocol. So when you are moving money from one bank to another, instead of using a SWIFT or a SEPA transfer, you will just use a blockchain transfer, a private blockchain transfer. And also, I believe that it's really hard to imagine a CBDC being issued on Ethereum, Solana, Tron, right? So that will be still the duty of privately issued stablecoins to bring the national currencies on public blockchains. Right, but why do you think that people would care about that? Why do you think people would care whether these digital currencies are running on Solana or on any other specific blockchain? I think that most people would just care about a system that works, that works well. Well, that's a fair point, but I still believe that having one of the things that excites people about the public blockchains is the programmability. So you can build more complex behaviors and games and even, you know, now that we are in a game fight, right? So there are games that could have a financial aspect that will not likely run on a privately managed blockchain from a government, but still they will run on a public blockchain that is auditable and by everyone and so on. And so I believe that there are still important aspects for public blockchains, that is, you know, all the possible experimentations that you can do and the absolute ability of making money programmable. I hardly think that a privately issued or privately maintained blockchain will be EBM compatible and will let you to create complex behaviors. OK, cool. Thanks a lot, Paolo, for jumping on our show. It was a pleasure to have you with us. Well, thank you very much for your time. It was a really pleasure to talk to you and meet you. That was Paolo Ardoino, CTO at Bitfinex and Tether. I'm Giovanni, your host. See you next time.