According to Huoxing Finance, 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 enabling criminal activity, 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 (Digital Asset Market Transparency Act), banks have expressed concerns that allowing crypto exchanges to offer rewards for stablecoins could trigger deposit outflows.
Tether CEO Claims Stablecoins Backed by U.S. Treasuries Outperform Tokenized Bank Deposits
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Summary
Tether CEO Paolo Ardoino said stablecoins backed by U.S. Treasuries provide better liquidity and greater stability for crypto markets than tokenized bank deposits, which are often only 10% liquid. 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 fears of deposit migration if stablecoin rewards are permitted, touching on the securities versus commodities debate.
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