Reading pen farming | Exclusive interview with the technical chief of Tether (USDT) | Xiaobian's private notes

Stablecoins (anchor coins) are our point of contact from the physical world, bridging the cryptocurrency market, and vice versa.

Among them , Tether (USDT) is the largest transaction volume - if the LikeCoin in your hand is "realized" through the exchange channel, it will eventually end up in USDT - so it is necessary to understand the various types of USDT.

A while ago, the team had an exclusive interview with Paolo Ardoino, Chief Technology Officer of Tether (USDT) . Editor L (I) was so excited! This interview is really full of dry goods, and it is worth watching and scrutinizing carefully.

Editor L (me) also organizes the content of this video into a private note, which is not hidden, and shared with you! IG beautiful graphic version of the portal .

■ USDT decoupling crisis?

 Experience: Funds withdraw from the currency circle, instead of losing confidence in Tether

USDT used to trade below $1 on some exchanges. It means that the selling pressure of USDT was heavy at that time, which was higher than the demand for buying USDT on these exchanges, and the price dropped to 0.9XX to reflect the real supply and demand, which is a reasonable phenomenon.

“Tether is the most liquid dollar market, so of course if money needs to get out, it will come out through Tether,” Paolo said.

The reason for the high selling pressure is market panic. Some large funds have closed down or declared that they are "not playing", so it is urgent to exchange USDT for USD.

Of the 15 billion USDT redeemed by Tether, only 56 million USD went into the pocket of the competitor (USDC). The remaining USDT of about 14.95 billion was actually converted into US dollars, which shows that most of the people who left the market at that time really left the cryptocurrency market, rather than losing confidence in Tether .

“If something goes wrong with Tether, the price will not be 0.9XX, the price will be 0.5,” Paolo said.

■ USDT itself is the "liquidity" of the currency circle

 Experience: Complete reserves are the mainstay of liquidity

The 15 billion US dollars just mentioned is far more than 15% of Tether's total assets, and it is also an unprecedented amount in recent financial history. The point is that Tether handles all withdrawals without hesitation .

"Any other bank, if a customer asks for a one-time withdrawal of '15% of the bank's total assets', that bank will fail," Paolo said.

And Tether has been tested, it has always maintained a state of complete reserves and sufficient liquidity .

“Tether has always been the safest product in the industry, a mainstay of liquidity,” Paolo said.

■ Tether's reserves

 Experience: gradually phase out commercial paper and continue to move towards "zero"

Tether's reserves can be mainly divided into:

• Cash, cash equivalents, Treasury bills, commercial paper.

“The biggest concern is probably commercial paper, even though it is rated as much as treasury bills. In response to community feedback , Tether has listened to it, and we will phase it out and eventually eliminate commercial paper entirely, ” Paolo said.

Every time the old commercial paper matures, it buys new Treasury bills instead, a plan that began as early as 10 months ago. The market value of commercial paper has dropped from 45 billion in the early days to 8.4 billion now, and continues to move towards the road of "zero".

■ Can't Tether be a 100% cash reserve?

 Experience: Banks won't let you keep so much "pure cash"

"It's fine if you just put $10 million or $20 million in the bank, but you can't put more than $1 billion in the bank in 'pure cash', " Paolo said.

A bank or central bank will come to you and force you to invest in something, which can be short-term U.S. Treasury bills with a maturity of up to 3 months, they are considered cash equivalents, so there is no problem.

"Unless you're going to open your own bank, any company with a bank account can't hold so much 'pure cash', so having a diverse portfolio of reserves is a must ," Paolo said.

■ Audit and supervision of Tether

 Experience: Tether has a third-party proof of reserve report

“ There is no independent audit of a stablecoin, but there must be a third-party proof of reserves, ” Paolo said.

Tether's performance:

• Produced on a quarterly basis, the reserve certificate issued by a third party is disclosed on the official website.
• Provide all company information to the New York Attorney General on a quarterly basis.
• Fitch (one of the three major credit rating agencies) affirmed.
• Good communication with regulators, cooperating on two cases last year to assist users in recovering hacked money.

"We're the only company that provides all the information to the New York Attorney General on a quarterly basis, no one else does," Paolo said.

■ Concept expansion of stablecoins

 Experience: Banks are for Wall Street, Crypto is for All Street

Based on the experience of USDT, other Tether products can be used to create a healthy foreign exchange market without going through the banking system .

Attempts so far:

• Tether Euro
• Tether Mexican Peso
• Tether Gold

“Tether was created for all people living in developing countries who can’t safely use a bank , not Wall Street,” Paolo said.

■ What do you think about the Bitcoin market?

 Lesson: Bitcoin is here to stay

Paolo believes that this wave of Bitcoin's decline is a bit "unnatural", and large hedge funds from the traditional world are putting pressure on the currency circle to create a liquidity crisis in the cryptocurrency market.

Finally, Paolo concludes:

"There isn't a good answer, but I know bitcoin will always be around, and I'm not worried about bitcoin in the long run . A year from now, looking back, we'll regret not buying cheap bitcoin now. Remember! Protect Just don't use leverage."

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