Interview with Tether CTO: Understand the story behind Tether
Interviewee: Tether CTO Paolo Ardoino
Recently, Odaily conducted an exclusive interview with Tether CTO Paolo Ardoino, let us listen to the story behind Tether. The following is the translation:
Odaily：We are very happy to invite Paolo Ardoino, chief technology officer of Tether, to participate in our interview. We have also prepared many questions that the public and Tether followers care about. We also hope that you can have a deeper understanding of Tether through this live broadcast , let Paolo say hello to everyone first!
Paolo：Hello friends, I am very happy to participate in this interview.
Odaily：text
1. Why is Tether so popular?
Tether is the cryptocurrency industry's first stablecoin and is used by tens of thousands of traders every day. It is essentially the dollar on the blockchain, present on almost every cryptocurrency platform and exchange in the world. Tether's success comes primarily from word of mouth and a dedicated community that recognizes its innovation and utility.
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2. Can you explain the life cycle of Tethers?
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3. Can you disclose which commercial papers you have bought? Which countries and companies are they from?
The company is pleased that Tether's leadership in transparency has been recognized and brought to the attention. As noted in its published statements and most recent unqualified audit opinion dated June 30, 2021, the vast majority of commercial paper held by Tether are issuers rated A-2 and above. These ratings are S&P's short-term credit ratings. If an S&P rating is not available, the Moody's or Fitch rating is converted to the S&P equivalent using publicly available industry standard conversion tables.
To ensure its diversified exposure, Tether imposes limits on individual issuer and regional exposure of commercial paper. These are in line with Tether's investment policies and industry practices. The commercial paper held by the company is purchased through a public offering program. Therefore, unfounded speculation that "including commercial paper issued by cryptocurrency exchanges" is absolutely wrong. If such commercial paper exists, Tether does not hold it. None of the commercial paper purchased by Tether was issued by any affiliated entity.
4. What do you think about how Tether responds to a black swan event where a large number of users try to cash out at the same time?
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5. New York State has banned Tether and Bitinfex from continuing trading activities in New York. What went wrong, and how does Tether respond to these allegations?
Tether had no further comment on the matter, other than to say that it was pleased that the New York Attorney General's office completed its review and that Tether was not at fault. Tether is happy to see future developments.
You cited a press release from the attorney general's office. Tether also encourages everyone to read the transcript of the settlement, not just the press release.
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6. Given the size and importance of the Tether Reserve, why was it not audited by professional auditors, the Big Four, as one would expect?
The audit is ongoing and will take some time to complete. Passing audits has always been a challenge in the digital token ecosystem. Unfortunately, none of the stablecoins have yet passed financial audits. Tether is working with auditors and looks forward to the conclusion of the audit process.
During this period, Tether will continue to provide quarterly proof of assurance, still leading the way in terms of transparency.
For what it's worth, your presumption that the Big Four are somehow better than other auditors is wrong. For example, Circle obtained its current unqualified opinion from CP LLP. Tether receives the same certification standards from Moore Cayman. It would appear that Moore Cayman is more capable and specialized in this field than many other companies.
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7. For a long time, people have doubts about whether the change of Tether has caused the price manipulation of Bitcoin. An academic study has found that a player on the Bitfinex exchange used newly traded Tethers to buy bitcoin when the price of bitcoin fell, in order to prop up the price of bitcoin, and it was very effective. How will Tether respond to this question?
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8. Tether declined to comment on why the funds flowed between the Bitfinex account and the Tether account. Can you explain it?
This sentence is misleading, implying that funds often flow between Bitfinex and Tether accounts, while ignoring the specific fact that Tether lent funds to Bitfinex after Bitfinex was defrauded by Crypto Capital.
This loan was a responsible response under extremely challenging conditions. This move ultimately protects the company's clients and ensures that clients will not suffer losses due to Crypto Capital's fraudulent practices. The loan is negotiated on commercial terms between the two parties.
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9. In the face of the recent bear market, what features does a stablecoin like Tether have to deal with market volatility?
Stablecoins typically achieve price stability by being backed by a reserve asset, usually a fiat currency such as the U.S. dollar or a commodity. Today, stablecoins have emerged as a viable medium of exchange for e-commerce and are proving to be an optional channel for businesses to transfer payments between buyers and sellers as they look for cheaper and more efficient ways.
As for algorithmic stablecoins, they do not provide security in the event of a black swan. Stablecoins with a market cap of $5 billion or $10 billion are going nowhere. If you still need to settle with this market, I suggest you deal with this issue. But imagine if you have a stable currency with a market value of 80 billion to 100 billion US dollars backed by digital assets, such as Tether, it may be quite different. It's really hard to predict what will happen to algorithmic stablecoins, and whether there will be enough liquidity to support such a huge knock-on effect. Algorithmic stablecoins could be subject to liquidation events, which could end up being catastrophic events brewing. In this sense, stablecoins backed by real assets are more transparent and trustworthy.
Odaily：I am very grateful to Paolo for answering Tether's questions without saying anything. We can see that Tether, as the world's largest stable currency, has received attention and voices from all walks of life. We can even see what Tether has done for cryptocurrency and the free economy. effort. We look forward to seeing more possibilities that Tether brings to the industry.
