This article is from: Forbes

Translation by: Odaily Planet Daily (@OdailyChina)

Translator: Azuma (@azuma_eth)

The world's largest stablecoin issuer, Tether, is planning to enter the U.S. market and create a decentralized version of an AI model to compete with OpenAI.

For Paolo Ardoino, Friday was as busy as usual. As the CEO of Tether, a giant enterprise with a stablecoin issuance scale exceeding $140 billion, Ardoino was being interviewed by the media at Cantor Fitzgerald's office in Manhattan, continuously answering reporters' questions about the company's U.S. expansion plans. Cantor Fitzgerald has been led for decades by current U.S. Secretary of Commerce Howard Lutnick, and is not only the main custodian of Tether's U.S. Treasury bonds but is rumored to hold 5% of Tether's shares.

Just weeks after the Trump administration took office, Ardoino flew to Washington to meet with lawmakers and regulators such as the U.S. Commodity Futures Trading Commission (CFTC). As Congress moves forward with several stablecoin-related bills, Tether hopes to be involved. Ardoino stated, "I believe our voice must be heard in the process of drafting stablecoin legislation… Our competitors are too small to represent the actual use cases of stablecoins."

This description is somewhat exaggerated but not without merit— even the closest competitor to Tether, Circle, has a stablecoin issuance scale of less than half that of USDT, at about $60 billion; the third-ranked USDS (formerly DAI) is around $8 billion— Tether is undoubtedly the industry leader. Ardoino noted that Tether adds 30 million addresses each quarter. With its first-mover advantage and deep engagement in emerging markets, Tether's stablecoin has become a financial lifeline in the volatile cryptocurrency market.

Last year, investments in U.S. Treasury bonds in a high-interest-rate environment brought Tether $13 billion in "financial results" (which Tether referred to as profit in a press release, but it is unaudited). Tether does not pay interest to USDT holders, so most of its income comes from Treasury bond yields. Additionally, it invests in cryptocurrencies, precious metals, corporate bonds, and loans. About 82% of Tether's U.S. dollar stablecoin reserves are in cash or short-term government bonds, while its main competitor Circle (which plans to go public in the U.S. later this year) disclosed in filings with the SEC that its pre-tax profit for 2024 is only $285 million.

Despite this, Tether, headquartered in El Salvador, has long been viewed as avoiding U.S. regulation. In 2021, it paid a $42.5 million settlement to the CFTC for making misleading statements about USDT reserves. Ardoino, who resides in Lugano, Switzerland, hopes to change this image: "Some competitors are trying to push for regulations to stifle Tether; their strategy has always been 'Tether will never dare to enter the U.S.,' and now we are here. We are even considering launching a domestic stablecoin in the U.S. How interesting is that for our competitors?"

Ardoino emphasized that this new product will not replace USDT— USDT is designed for emerging markets, with most trading volume occurring on the TRON network, led by billionaire Justin Sun. Instead, the stablecoin will be a parallel product tailored for a highly banked and digital U.S. economy. Ardoino admitted, "You absolutely cannot create a product that is similar to or even inferior to PayPal, Zelle, or CashApp. We need time to conduct in-depth market research, but we already have some ideas for creating excellent digital payment products."

Last month, Tether also hired a CFO to advance a long-delayed comprehensive financial audit, stating that it is in talks with one of the Big Four accounting firms.

The Italy-born Ardoino scoffs at the new stablecoin upstarts chasing institutional clients— "Institutions will betray you for a 0.01% basis point advantage."

Meanwhile, Ardoino is also dismissive of the industry's obsession with interest-bearing stablecoins, which pay interest to depositors like money market funds, but Ardoino bluntly calls it a "bad idea." First, they may be classified as securities; second, it would lead to cutthroat competition— if you return all the profits, you cannot make a profit, and if you say, "I only keep 1%," others will say, "Then I will only keep 0.01%."

Currently, the stablecoin bills under consideration in Congress do not include interest-bearing stablecoins, possibly due to concerns about competition with traditional financial institutions that offer savings accounts and money market funds.

Ardoino acknowledged, "Americans can certainly complain that USDT does not pay interest, while in places like Argentina, where fiat currency can fluctuate by 10% in a day, a 4% annual yield is insignificant." "They don't care about interest; they just want a reliable product. The problem is that most competitors are only focused on the present and can't even find Africa on a map."

However, Ardoino views another potential competitor differently— the cryptocurrency company World Liberty Finance, controlled by the Trump family, recently announced the launch of the stablecoin USD1. Ardoino stated, "I really like USD1 and appreciate the World Liberty Finance team; I have already told them I would be happy to collaborate."

Ardoino revealed that he has met with one of the co-founders of World Liberty Finance but stated that they have not discussed investment matters and have not yet contacted members of the Trump family— at least not yet.

Although Tether's U.S. stablecoin plans are still in the early stages, it is actively expanding into the artificial intelligence field. Ardoino disclosed that the company plans to launch its own AI platform in June (or September) as a peer-to-peer alternative to models like OpenAI.

Ardoino stated, "Our platform allows you to have complete control over your data, with all AI reasoning and complex logic running on local devices— whether it's a $30 smartphone, an iPhone, an Android phone, or a laptop— and can connect directly to other devices for computing power. This is a way to protect data sovereignty without sharing with platforms like ChatGPT."

Ardoino particularly emphasized the concept of "decentralization" in the cryptocurrency field: "Centralization is fragile. Companies like OpenAI will eventually disappear because they are just money-burning businesses that rely on extracting user data."

Tether's vision is precisely the opposite— to cultivate a billion vertical AI models rather than a single omnipotent model. Ardoino mentioned that Tether hopes everyone can create models focused on specific areas, whether they are students, universities, or small businesses. The platform will be free to use, but each AI agent will ultimately have a built-in USDT wallet.

Currently, Tether has hired about 60 developers (one-third of its total staff) to self-fund the construction of this system. To support AI expansion, Tether has also invested in a venture capital fund, which Ardoino claims has reached about $10 billion, making it one of the largest funds in the cryptocurrency industry. These investments may help garner support from portfolio companies for its new business. It is estimated that between 2023 and 2024, Tether has invested over $1 billion in the German-listed data center operator Northern Data through multiple transactions.

Ardoino concluded, "I hope Tether is remembered not only for its stablecoin but also as a technological innovator— creating net positive value for the world."

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