• In May of 2022, the third-largest stablecoin by market cap, TerraUSD (UST), imploded, leading to skepticism about the safety of stablecoins.
• Cointelegraph’s Elisha Owusu Akyaw (GhCryptoGuy) interviews Tether CTO Paolo Ardoino about the utility of stablecoins and the FUD associated with them.
• Ardoino claims that some FUD was spread privately and publicly by competitors, but that the FUD served to improve trust between consumers and the company.
In May of 2022, the third-largest stablecoin by market cap, TerraUSD (UST), imploded, leading to an identity crisis for the entire stablecoin sector. With this, consumers began to question the safety of stablecoins, and the industry was engulfed with fear, uncertainty, and doubt (FUD). In order to address these questions, Cointelegraph’s Elisha Owusu Akyaw (GhCryptoGuy) interviewed Paolo Ardoino, the chief technology officer of Tether, in the seventh episode of Hashing It Out.
During the interview, Ardoino discussed the utility of stablecoins and the FUD that had been associated with them. He claimed that some of the FUD was spread by competitors, both privately and publicly, but that this only served to improve trust between consumers and the company. He also pointed out that Tether was able to process $7 billion in redemptions in 48 hours, which was 10% of the company’s reserves, and that this was a remarkable achievement that would be recorded in the history books of global finance.
Ardoino then went on to discuss how to ensure that the industry does not again end up in a situation similar to what happened with TerraUSD. He argued that developers should be transparent in their code and operations, should be able to respond to customer inquiries quickly and efficiently, and should keep their customers informed of any new developments. He also noted the importance of proper risk management and the importance of having a reserve strategy. He concluded by emphasizing the importance of having a good legal structure in order to protect customers and ensure compliance with regulations.
Overall, Ardoino was bullish on the utility of stablecoins and was confident that they would be able to regain the trust of consumers. He was also confident that the industry would learn from the mistakes of the past and would be better prepared to face any future challenges. With the increased scrutiny of stablecoins and the FUD that comes with it, the importance of transparency and proper risk management can’t be understated. With the right measures in place, the stablecoin sector can continue to provide a valuable service to both consumers and the industry as a whole.