CBDCs to Have Little Impact on Private Stablecoins, Claims Tether CTO Paolo Ardoino

Tether CTO asserted that private stablecoins such as USDT will remain relevant even in the era of government-issued digital currencies.

By Shomik Sen Bhattacharjee | Updated: 10 March 2022 19:01 IST

CBDCs to Have Little Impact on Private Stablecoins, Claims Tether CTO Paolo Ardoino

Photo Credit: Unsplash/ DrawKit Illustrations

Tether (USDT) is among the largest private stablecoins around in terms of market cap

Highlights

Ardoino claims CBDCs will replace banking systems like SWIFT
86 countries are currently in the process of developing CBDCs
Private stablecoins will offer the edge of choosing a blockchain

Paolo Ardoino, CTO of Tether, believes that the growing development of central bank digital currencies (CBDCs) around the world will not really affect the role of private stablecoins. Paolo noted that fiat currencies are already digital currencies in essense but due to dependency on the 30 years old technology, these are inefficient and require massive investment in maintenance. Ardoino is of the opinion CBDCs would only replace centralised payment networks as SWIFT and use private blockchains to fulfill most transactions.

Ardoino who posted a thread on Twitter about his views on the growing discussion around CBDCs and their role in the current payment system, explains that CBDCs are not designed to digitise fiat currency, as that something that has already been done, given that most modern transactions are digital.

1/
Few thoughts on CBDCs
- FIAT is mostly digital already
- but it relies on an outdated tech infra built 30y ago and kept together with rubber and bands
- and it requires ton of maintenance with enormous costs
- and is not standardised at capillary level
— Paolo Ardoino (@paoloardoino) March 10, 2022

3/
- CBDCs will use private blockchain as modern and cost-controlled tech infrastructure
- CBDCs won't be issued on your favourite chain, private stablecoins will continued to serve that use case

Point being: tech evolves but nothing actually changes.
Only #bitcoin is our edge.
— Paolo Ardoino (@paoloardoino) March 10, 2022

Ardoino claims that the main role of CBDCs is to employ private blockchain as a state-of-the-art, cost-controlled technology infrastructure in which the majority of bank transfers and credit/ debit card transactions will be carried out. He does point out the benefits of CBDCs too, stating that their onset will mean quicker settlements of wire transfers, including those that are made of the weekend.

The Tether CTO adds that private stablecoins such as USDT will remain relevant even in the age of government-issued digital currencies since private stablecoins would give users the option to transfer across chains and would be available across multiple blockchains of choice, something CBDCs won't have on offer.

South Korean Crypto ‘Icon’ Gains 60 Percent as New President Steps In

Paolo Ardoino's comments on the relevance of private stablecoins at a future of CBDCs arrives at a time when conversations appear to be gathering steam whether private stablecoins will see a dip in demand once CBDCs see wider adoption.

As highlighted by a Cointelegraph report, the Atlantic Council's CBDC tracker finds that 86 countries, including India, are currently in the process of developing their sovereign digital currency, a number that has doubled since May 2020. Out of these 86 nations, nine countries have already launched their CBDC while fifteen countries are in the pilot phase.

Dubai Approves Law on Virtual Assets: Details Here

What should you know about MWC 2022? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.