As a researcher with experience in the crypto space, I find Garlinghouse’s comments regarding Tether and the potential US government action against it intriguing. The implications of such an event could indeed cause significant disruption within the cryptocurrency ecosystem, given Tether’s dominant market share and its widespread use.
In a recent interview, Brad Garlinghouse, the CEO of Ripple, expressed his belief that the U.S. government may soon focus its regulatory efforts on Tether (USDT). Given the ongoing push for stablecoin regulations in the United States, it’s possible that the authorities could take action against influential players such as Tether. However, just a few hours later, Paolo Ardoino, the CTO of Tether, disputed Garlinghouse’s claims, stating that the Ripple executive was attempting to spread fear regarding USDT.
Targeting Tether Can Disrupt Crypto
During his interview on the World Class podcast with Chris Vasquez, Garlinghouse expressed a crucial perspective. He underscored that any moves taken by the US towards the stablecoin creator could lead to substantial upheaval in the cryptocurrency market. To put it simply, Garlinghouse warned that potential US actions against the issuer of stablecoins might result in significant turbulence within the digital currency sector.
It’s apparent that the US Government is taking action against Tether. I consider Tether to be a crucial component of the ecosystem, and I’m uncertain about the potential repercussions on the larger system if it is significantly affected.
The assertion emerges in light of recent findings that USDT, Tether’s stablecoin, is being used by terrorist organizations and sanctioned countries to bypass US financial restrictions. In April, Adewale Adeyemo, the US Deputy Treasury Secretary, testified before the Senate Banking Committee, emphasizing Russia’s growing tendency to employ alternative payment methods such as Tether’s USDT to skirt economic sanctions. More recently, Deutsche Bank has raised concerns about Tether’s business practices and cast doubt on the robustness of the stablecoin market.
CTO Paolo Ardoini Lashes Out
Ripple is preparing to introduce its own stablecoin within the next month, potentially by June. Remarks from Garlinghouse concerning Tether have surfaced recently. This timing has fueled speculation that Ripple’s executive may be attempting to carve out a niche for itself in the fiercely competitive stablecoin market, where Tether holds roughly 60% of the market share.
During a heated exchange with Garlinhouse, Ardoino voiced doubts about the trustworthiness of declarations made by an unidentified CEO. Given ongoing SEC investigations into their business dealings, Ardoino questioned whether the CEO’s statements were driven by hidden agendas. He employed the Latin phrase “cui prodest,” meaning “who stands to gain,” to emphasize this point.
As a researcher studying the topic of stablecoins, I would like to present a defense for Tether (USDT) based on its current position in the market. USDT is unquestionably the most broadly adopted stablecoin worldwide, with a user base encompassing hundreds of millions of individuals. This is particularly noteworthy in emerging markets and developing countries where access to traditional financial services may be limited.
A CEO dressed in business attire, heading a firm under SEC scrutiny, is rumored to be introducing a rival stablecoin, raising alarm about USDT in the process.
Let me give you an update on Tether USDt ecosystem safety.
USDt is the most used stablecoin in the world, with…
— Paolo Ardoino (@paoloardoino) May 13, 2024
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2024-05-13 11:12