What is the purpose of the largest stablecoin Tether (USDT)?

20.04.2024 20:16 2 min reading
What is the purpose of the largest stablecoin Tether (USDT)?

According to Tether CEO Paolo Ardoino, the main purpose of Tether USD (USDT), the world's largest stablecoin, is to provide protection for people in economies struggling with inflation.

Arduino pointed out Tether's primary mission is to assist the unbanked population, especially those who do not have access to traditional banking services, by offering them access to USDT.

He highlighted the importance of the stablecoin as a tool for individuals living in regions neglected by the banking sector, estimating that there are around 300 million such people globally. These individuals, although financially marginalized, can benefit from the stability of USDT in the conditions of economic shocks.

Ardoino highlighted the increasing reliance on alternative financial options, such as the US dollar, in countries experiencing high inflation. In particular, in Argentina, where the national currency has depreciated significantly against the dollar, USDT serves as a viable value-preserving alternative.

Tether's strategy is aimed at strengthening USDT's security measures, including investments in government securities, gold and Bitcoin, with plans to move entirely to government securities in the near future.

With a market capitalization exceeding $109.7 billion as of April 20, Tether leads the stablecoin market by a significant margin, eclipsing competitors such as USDC on Circle. Arduino attributes Tether's success to its alignment with the needs of individuals seeking financial accessibility and stability, unlike other stablecoin providers that target traditional banking institutions.

In contrast to the use of stablecoins in Europe and the US, which Arduino notes as minimal, Tether remains committed to serving the unbanked population in emerging markets, prioritizing stability and affordability.


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