Preface

This issue of TokenInsight interviewed Mr. Paolo Ardoino, CTO of Tether and Bitfinex. In response to a series of disputes surrounding USDT, Mr. Ardoino gave answers. In addition to issues such as USDT reserves, supervision, and stable currency competition, TokenInsight also discussed with Mr. Ardoino on issues related to the Bitfinex exchange.

This issue of TokenInsight interviewed Mr. Paolo Ardoino, CTO of Tether and Bitfinex. In response to a series of disputes surrounding USDT, Mr. Ardoino gave answers. In addition to issues such as USDT reserves, supervision, and stable currency competition, TokenInsight also discussed with Mr. Ardoino on issues related to the Bitfinex exchange. The main points of Mr. Paolo Ardoino include:

• USDT is backed by 100% reserves;

• Many doubts about Tether come from within the industry;

• Mr. Ardoino is delighted and praised the development of DeFi and decentralization;

• The market size of algorithmic stablecoins needs to be comparable to today’s stablecoins in order to succeed;

• Mr. Ardoino believes that USDT supported by multiple chains is its market advantage;

• Bitfinex will continue to expand the market based on the principle of community first in 2021;

• Mr. Ardoino believes that the investment future of holding Bitcoin is promising;

• Mr. Ardoino believes that Bitfinex can provide a legal and standardized trading environment for digital assets to go mainstream.

In this issue, we separate Mr. Ardoino’s answers to Tether and Bitfinex. The following is the entire interview:

About Tether

TokenInsight: Is USDT really a full deposit? What assets are included in USDT’s reserves?

Mr. Paolo Ardoino: Every Tether token (USDT) has 100% reserves. The savings includes traditional legal tender and many cash equivalents, as well as some other assets, such as some accounts receivable that Tether lent to third parties. In the pricing of USDT by Tether Operations Limited, it has always insisted that each USDT be anchored at one U.S. dollar.

TokenInsight: What do you think of the doubts that “USDT lacks supervision and just prints money out of thin air”?

Mr. Paolo Ardoino: I think some of the recent doubts about USDT come from laymen, that is, nocoiners who do not believe in digital assets such as Bitcoin. They have also migrated this idea to USDT.

TokenInsight: How do you view the competition in the stablecoin industry? Especially in the DeFi field?

Mr. Paolo Ardoino: As the most stable, liquid and trusted stablecoin, USDT is promoting the innovation of the digital asset industry and encryption technology. At the same time, it is the assistance of USDT that has promoted the birth of many powerful protocols in Ethereum, including projects in DeFi. While USDT is breaking various growth records in the market one by one, we are very pleased to see that stablecoins are expanding the overall monetary base market. We commend consumers for making free choices in the free market. Compared with single-handedly, only by combining the power of multiple companies in the market can we accomplish great things.

TokenInsight: What do you think of decentralized stablecoins? For example, is the stablecoin of the opportunity algorithm just a bubble? Will they succeed?

Mr. Paolo Ardoino: Algorithmic stablecoins must be able to scale to the same scale as today’s stablecoin market, billions of dollars, in order to be able to deal with large-scale liquidation without causing significant disruption to the entire market. As far as the current situation is concerned, in order to make the algorithmic stable currency a reliable liquid asset, some technical obstacles need to be overcome.

TokenInsight: What do you think of the SEC’s lawsuit against Ripple? Do you think the “sniper list” of the SEC or the US government will be expanded to affect other digital assets including USDT?

Mr. Paolo Ardoino: I don’t want to comment on the Ripple and SEC case. USDT is registered and supervised under FinCEN, the US financial crime enforcement network. The strict KYC and anti-money laundering (AML) framework applies to all direct users of Tether, which are the same as our other centralized agency competitors.

TokenInsight: What do you think of the stablecoin market in 2021? In the competitive landscape of USDC and decentralized stablecoins, what do you think are the advantages of USDT?

Mr. Paolo Ardoino: In the future, we may see stablecoins penetrate more deeply into the non-digital asset market, thereby helping to increase public adoption. As digital currencies become a “new normal”, the difference between using stable currencies and fiat currencies when people trade will shrink.

I think the existence of USDT on various blockchains is its main advantage to maintain the most stable, most liquid and most innovative stable currency. These mainstream public chains include Algorand, BCH’s SLP, Ethereum, EOS, Liquid Network, Omni and Tron. Supporting multiple chains allows USDT to provide services to multiple different communities in the ecosystem.

About Bitfinex

TokenInsight: How do you view the competition among large exchanges? In 2021, what is Bitfinex’s market expansion plan?

Mr. Paolo Ardoino: What can be seen is that competition among exchanges has intensified. This is reflected in the fact that the exchange pays more attention to day-to-day operations rather than industry innovation as in the early days. I believe that the exchange should focus more on integrating and supporting high-quality projects with more potential in the digital asset ecosystem. At the same time, the exchange should provide better quality education and other valuable services to serve as a stepping stone for new users.

As a developer-driven trading platform, we adopt the principle of community first for market development. We have been providing customers with the tools needed for trading. Our real-time market data terminal Bitfinex Terminal is the best evidence, which can meet the trading needs of the growing algorithmic traders on our platform. At the same time, our commitment to the Lightning Network and the launch of projects such as the RGB protocol and OmniBolt also confirms this well.

TokenInsight: As the scale of decentralized exchanges continues to grow, what is your view on DEX?

Mr. Paolo Ardoino: I believe that decentralized exchanges (DEX) are a key part of the future of digital assets. The ideal decentralized exchange should be peer-to-peer, and support centralized matching, peer-to-peer settlement, and large quantities of small transactions. The network structure is very similar to the Lightning Network. We are also working hard to provide centralized and standardized trading interface products for non-custodial exchanges.

TokenInsight: What do you think of mainstream currencies such as Bitcoin and Ethereum in 2021?

Mr. Paolo Ardoino: We believe that investors who hold Bitcoin “have a bright future.” We see a bright future ahead for bitcoin holders.

TokenInsight: What do you think about the supervision of exchanges in the future?

Mr. Paolo Ardoino: Regarding supervision, we welcome proper supervision, and we will interact with regulatory agencies and legal departments as appropriate.

BFXNA Inc. is registered as a money service business in FinCEN of the U.S. Department of the Treasury and has obligations and requirements related to the Bank Secrecy Act. Bitfinex does not engage in any business in the United States, and no American is allowed to use any of our services.

In addition, Bitfinex has strong and first-class anti-money laundering capabilities, which can deter the financing of terrorism and illegal sanctions programs. This not only satisfies our legal obligations, but also satisfies our desire to become a good company and a good citizen. The security measures we have taken can effectively prevent illegal transactions, suppress smuggling activities, and improve the security of the wallet on our platform.

We believe that centralized exchanges like Bitfinex can provide a legal and standardized trading environment for digital assets to go mainstream.

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