Tether CEO Ardoino Says He Expects U.S. Will Catch Up in Crypto Regulation

• Stablecoin issuer Tether's CEO made a U.S. appearance to explain how helpful his company is being with law enforcement agencies and how he'll embrace government oversight.
• The appearance at DC Fintech Week was remote, with Paolo Ardoino making his case from a video screen.

Tether CEO Paolo Ardoino told a U.S. crowd on Tuesday that he's counting on sensible crypto regulations coming soon from the U.S.

"There is no place like the U.S.," he said via video link at DC Fintech Week in Washington. "I think it's very, very important that sensible crypto regulations and stablecoin regulations will come to fruition in a way that will protect the end users," he said, predicting that would happen in the U.S.

When the U.S. arrives at rules, it will allow stablecoin innovations to continue to offer a "lifeline" to people in other parts of the world who "don't have the same opportunities as people in the U.S. and Europe."

Tether is the top global issuer of stablecoins – namely USDT$1.00. Stablecoins are a subset of the cryptocurrency sector that are generally pegged to the dollar or other non-volatile assets, and they're meant to be the more steady side of transactions into otherwise volatile crypto.

Tether and its CEO have been making a recent case that the decade-old company is cooperating with governments after a history in which it was known more for defiance of such relationships. Ardoino, tuning into the event on his 40th birthday, argued that it would be difficult to find another financial firm that matches the level of law-enforcement cooperation and number of agency relationships that Tether has in 45 countries, including with the Federal Bureau of Investigation and the U.S. Secret Service.

Making the case for stablecoins and Tether, which now boasts more than 330 million users, he said his company survived billions in sudden redemptions in 2022 – more than 10% of its reserves – that was "a type of pressure that almost no bank was able to survive." He argued that Tether's 104% over-collateralized reserve, based mostly (84%) in U.S. Treasuries, is the best quality backing the company could set up, though the company has long taken criticism for a lack of transparency into its holdings.

"We are purchasing immense quantities of U.S. debt," Ardoino said. "The most important job of a stablecoin issuer is being able to liquidate the reserves and pay back everyone" in a time of redemptions, he said.

He contended that the company's holdings would rival a mid-range country in its Treasuries portfolio, but it carries less risk to the U.S. because it doesn't represent a single entity that can buy or dump huge swaths of the market in one action.

Read More: Stablecoin Regulations Could Pose Problems for Tether, JPMorgan Says; USDT Issuer Claims Sour Grapes

Ardoino said that Tether's non-U.S. focus makes sense, because people in the U.S. already have easy access to dollar-based assets, while such assets are urgently needed in other countries – especially those with massive inflation.

"I am very in favor – and we as a company are very in favor – of regulations, but regulation should help defend the customer," Ardoino said, arguing that European standards for stablecoins are problematic, in part, because of that region's particular approach to cash reserves.

Read More: Tether's USDT Has Uses Beyond Crypto Markets, Trading: CEO Paolo Ardoino

The company has also been subjected to law-enforcement scrutiny itself, though that hasn't developed yet into a major criminal case in the U.S.

Also at the conference, Rep. French Hill (R-Ark.), who leads the crypto panel within the House Financial Services Committee, said that crypto and stablecoin legislation have a chance to catch traction in the final weeks of the congressional session known as the "lame duck" period. He said the Senate has left a gap in a defense spending package for potential financial-services additions, though Hill added that the legislative strategy may depend on who wins the presidential election.

If it doesn't happen this year, Hill – who may be a contender to run the wider committee next year as its chairman, Rep. Patrick McHenry (R-N.C.), retires – said crypto will be a top priority for the session starting in 2025.