Stablecoin Tether, a prominent player in the realm of digital assets, is witnessing a significant surge attributed to its role as a substitute for the US dollar in emerging economies rather than merely serving as a commodity for cryptocurrency trading, according to Paolo Ardoino, the CEO of Tether, in a statement to Reuters on Friday.
Tether, known for issuing a stablecoin dubbed USDT, engineered to uphold a consistent value pegged to $1, has experienced rapid expansion in recent years. Its circulation surpassed a staggering $100 billion worth of Tether tokens by March. Ardoino highlighted this evolution, stating, “In the last few years, we have seen the usage of USDT transition from purely cryptocurrency trading to essentially becoming the most prevalent digital dollar worldwide.”
Speaking at the Token2049 crypto conference in Dubai, Ardoino noted the predominance of Tether’s utilization in emerging markets, citing Turkey, Vietnam, Brazil, Argentina, and various African nations, where the availability of US dollars can be limited. He remarked, “Almost the entire user base resides within emerging markets.”
Ardoino specifically emphasized Argentina’s robust adoption of Tether in the past year, indicating its burgeoning prominence within the nation. With over 300 million global users, Tether aims to serve as a financial cornerstone, particularly for the unbanked population, Ardoino asserted.
Regulatory authorities have long voiced concerns regarding the market implications stemming from the widespread adoption of cryptocurrency assets. The Bank for International Settlements cautioned in a report last year about the exacerbation of financial risks in developing economies due to crypto assets, contrasting their appeal as a purportedly straightforward solution to financial challenges with their actual complexities.
In Argentina, cryptocurrency exchanges play a pivotal role in the currency landscape, with both local residents and international traders utilizing the Tether-peso pairing on crypto platforms as a surrogate for the US dollar-to-peso exchange rate. Despite the tumultuous market downturns witnessed in 2022, cryptocurrency markets have largely recuperated.
As Tether continues to solidify its position as a viable dollar alternative, its influence in emerging markets underscores a paradigm shift in the global financial landscape, with digital assets playing an increasingly integral role in economic transactions worldwide.
