ChainCatcher report: Tether CEO Paolo Ardoino stated that stablecoins are a more trustworthy form of money than tokenized bank deposits, as the former are nearly fully backed by U.S. Treasuries, while the latter are typically supported by only 10% in liquid assets. Pablo Hernandez de Cos, General Manager of the Bank for International Settlements (BIS), noted that stablecoins face issues related to redeemability, supply, interoperability, and facilitating crime, and described tokenized bank deposits as a more direct path to preserving the foundations of the monetary system while leveraging tokenization. Ardoino pointed out that USDT’s market capitalization has exceeded $183 billion and is being used in some emerging markets for both domestic and cross-border commerce. In discussions surrounding the CLARITY Act, banks have expressed concerns that allowing crypto exchanges to offer rewards for stablecoins could trigger deposit outflows.
Tether CEO Claims Stablecoins Are Backed by Full U.S. Treasury Holdings, Challenges BIS on Tokenized Bank Deposits
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Summary
Tether CEO Paolo Ardoino said stablecoins provide greater trust than tokenized bank deposits, pointing to their nearly full backing by U.S. Treasury securities. He contrasted this with tokenized deposits, which often have only 10% liquidity support. BIS head Pablo Hernandez de Cos raised concerns about stablecoin risks, including redemption and criminal activity. Ardoino highlighted USDT’s $183 billion market cap and its importance in emerging markets. The CLARITY Act debate has sparked concerns about liquidity and crypto markets, with banks fearing deposit outflows if stablecoin rewards are permitted. Risk-on assets like stablecoins remain central to the evolving financial infrastructure.
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