Bloomberg Audio Studios podcasts, radio, news.
Hello and welcome to another episode of the OddLotss podcast. I'm Tracy Aloway.
And I'm Joe Weisenthal.
Here in New York. That's right. It is my 10-year anniversary at Bloomberg this month.
This month. Oh, that's awesome. You're going to get a pilot. That's great.
It's put me in a very thoughtful mood.
A whole decade since Joe tricked slash enticed me into coming here. So, thank you, Joe.
Are you happy about how it all worked out?
I did try. I can't complain. Okay, good. Good. I will say it was a bit rocky in the beginning, but we worked it out. All right. Where's this going? Okay. In that 10 years, a lot of things that I would never have expected to happen have happened.
One of them is the phenomenal growth of the crypto industry. So, I first started writing about Bitcoin in 2011 and I will openly admit that I think by like 2013 I had written I think like three or four obituaries for Bitcoin as well. So, you know, I got that wrong clearly. But one of the other things I got wrong on crypto is the phenomenal growth of stable coins.
So you look at something like Tether, the world's biggest stable coin. We talk about it in the same sentence nowadays as Euro dollars for instance. And the company itself is this huge player in financial markets. Like it owns more T-bills nowadays than some countries which is all pretty amazing.
Well, let's be honest for a second here. You know, you might have thought that Tether wouldn't even exist at this point because it had a reputation for years and years. Like they're a bunch of scammers, they can't pass an audit, the money isn't there, etc. It's going to go away. Why would you ever hold a Tether? We asked Sam Bankman-Fried that years ago. Why would you hold a Tether when there are other companies that have done audits, etc. There are many people, not only setting aside the size, setting aside all of the assets that it owns that back, you know, the world's most popular stable coin, there are many people who just thought this company can't continue.
The other thing I thought was that US officials were never going to grow comfortable with the idea of a loosely regulated foreign company creating synthetic dollars. But you know, the Trump administration seems to have some other ideas. So, we should talk about all of that. Let's do it. We have the perfect guest. We do have the perfect guest. We're going to be speaking with Tether CEO Paolo Ardoino. He is, of course, the head of the world's largest stable coin. So, Paolo, thank you so much for coming on the show.
Thank you for having me. I'm very excited to be here today.
So just to begin, has Tether's growth surprised you? Did you ever expect to ramp up to this degree?
So I joined Tether very early, was early 2015, just after a couple of months that it was actually created, and we were discussing internally myself and John Carlo, and we were asking ourselves the biggest number we could think about in terms of growth and projection of growth of our stablecoin was between $100 million and $1 billion. And now today it is $144 billion in total issued tokens. So we are incredibly excited. We are impressed ourselves. But I must say that it has all happened organically over a decade.
The stablecoin business is so sick, it seems to me, right? Because you hold all of these assets that back one-to-one, these tokens that move on blockchains, and you collect all this interest, and the holders of the coins don't collect any interest. According to a release on Tether's own website, you made $13 billion in 2024. Various estimates have your total employees somewhere a little bit below 200. So that makes profit per employee somewhere close to $90 million per employee. Like that's basically correct math that this is like one of the most extraordinary, maybe the most profitable business in the history of business.
Yeah, I think it's definitely extraordinary. I define Tether a once-in-a-century company because of the capital that we have. Given our profits in the last two and a half years, we made around $20 billion in profits, and we almost distributed, well, we distributed a very, very tiny part to our shareholders. I mean, name another company, another fund or whatever, that distributed less than, I don't know, 10% or probably even less than 5% of profits to their own shareholders. So that is something that is unprecedented, and it's set in Tether to be able to reinvest 95% of its profits in keeping growing its distribution network for the US dollar and also invest in other pretty cool things from artificial intelligence, Bitcoin mining, and tens of other opportunities around the world.
So you mentioned distribution of the US dollar and there is some tension there, right? I mentioned earlier that I never thought regulators were going to be okay with someone basically creating a synthetic dollar that can trade around the world, but times have changed and some things are shifting on the regulatory front. But are you a competitor to the US dollar? Plenty of people would say you are, or are you something that perhaps complements it?
I don't think we are a competitor to the US dollar. USDT is a digital dollar that is backed for most of it by US Treasuries. We are bringing the US dollar out there in the emerging markets, in developing countries. We have as of today more than 400 million users, actually will be 550 million users. I'd like to be a bit more conservative to avoid double counting users, so I would say more than 400 million users. We grow at the pace of 30 million new users per quarter. That is again, we are not Facebook. We are just a digital dollar. So it's really unprecedented and staggering. The reason why we are interesting for the United States and the regulators are now appreciating who we are and what we are doing is the fact that we have been building the biggest distribution network for US dollar in a physical form and a digital form. We have millions of touch points around the world in the emerging markets. We never approached our distribution going through institutions in the emerging markets, but we built physical infrastructure from kiosks in villages in Africa to bodegas in southern South America. And again, we are just distributing a digital dollar. And look, the reality is that the US dollar hegemony is very, very important for the United States. And when we are in Africa, when we are in central South America, there is not much US presence. There is actually, there is presence apart from maybe McDonald's, but in some countries in central South America, the actual presence of infrastructure of the United States is not there. So what Tether is doing in those countries is purely building that infrastructure and trying to, in a way, combat actually more than in a way, it's we are, I think, the last stronghold before the very strong push towards de-dollarization made by the BRICS countries. So we see for example that in central South America or in Africa, there are hospitals, schools, libraries, and airports that are being built by China. And again, there is an interest from the BRICS countries to launch a digital currency backed by gold. Plus they are building an infrastructure in these countries. So all the employees, all the people that will rotate and gravitate around these new infrastructures built by BRICS countries will start using something that is not the US dollar. So I think it's becoming very, very clear that actually Tether is the best ally for the United States. It is the company, when we are also in these countries, we are not seeing NGOs, we are not seeing charities, we are the company that also solved or is solving financial inclusion in the strongest way possible.
Joe, I got to say it's a little bit depressing that you know a company that was founded by an Italian in Europe, incorporated in the BVI, although I think you're moving to El Salvador, correct, is the ambassador for US president the ball work against the end of the dollar. Yeah. Well, history can be funny in that respect. Why haven't you ever been audited?
So in the past administration, the past four years, I must say that was not easy to deal with the past administration. So I remember Senator Warren sending letters around to different organizations. There was a case of Operation Chokepoint 2.0 that was very aggressive towards the banking industry that was supporting cryptocurrency companies. On the other side, that letter also scared away and was targeted towards the big four auditing firms and other auditors that were then disincentivized to go against the strong will of an administration that was really against crypto in general.
Just real quickly, so obviously you hold your money or a lot of your assets that you hold are with Cantor Fitzgerald, its former CEO Howard Lutnick, now the commerce secretary, friendly with the administration. There has been this changing of the guard. Has the changing of the guard at the administration level had any bearing on the reason that you're here in New York City and comfortable visiting the US?
So I have always been comfortable to visit the US, but you want usually to go where what you are doing for 97% of your time, or well 80% of your time given I sleep only a few hours, is being accepted and is not considered a very bad thing by the administration, right? So you want to deal with people that support what you're doing, at least they have the will to understand what you're doing. So actually the change in administration is what is making possible for us, for Tether and other many cryptocurrency-related companies, to start to deal with the big four auditing firms. We are in discussions. We have multiple discussions on the topic of audit. We hired a new CFO a couple of months ago, it's great. Simon went through multiple contentious full audits across his entire career. I don't think that audit should be contentious, but given again the complexity and the new field that is crypto world, it is possibly one correct term and adjective that could use here. And look, we are very positive that the full audit is our top priority and I'm pretty confident that we're going to make it.
So just to be clear on the regulatory point, things are changing as you just mentioned and previously there was regulatory pressure on the big accounting firms to not work with you. That seems to be going away. That's going to allow you to do an audit. Do you have a time frame for when you might do that?
So in the past we committed few times and we provided timelines that were not realistic because of the fact that as I said the administration really doubled down on trying to kill an entire industry. That was very, very sad to see. So again we are moving as fast as we can. There is of course some change that is still needed among the big four auditing firms. So while they are getting more comfortable, look, the administration changed only two months ago. So give them a little bit of time to get comfortable and we are providing all the, we are again already in discussions. So it's crazy, the administration changed two months ago and we are already in discussions with big four auditing firms. So that is the best thing that I can say and again the fact that we hired a new CFO and that has the highest experience in the sector to get through audits is something that should reinvigorate our position.
What's the complexity of doing an audit for a business like Tether? I've always wanted to ask this question. So, you know, you need a professional accounting firm to do this because you want to give people who use Tether, investors, some sense of safety and stability and truth in what you're portraying. But at the same time, it seems like, you know, you should have a pretty good idea. It seems simple. You just count up the treasuries and count up the tokens and if they match, what are we missing here?
I agree with that. In fact, the problem I don't think is about the complexity of going through our reserves because as we said we keep the majority, the vast vast majority of our treasuries in Cantor Fitzgerald, that is a very highly regulated financial institution here in the US. I think that the confidence in the industry, in the digital assets industry, is growing among the big four auditing firms. And look, on the other side, you can go on blockchains and blockchains are very, very transparent. So you can counter the liabilities through the transparency of the blockchain and on the other side you can just independently contact our custodians. I think that what we expect from the full audit is also confirmation of our good practices that we have within the company in terms of controls and safety and proper management for example the private keys and all that stuff. So that's a process that we want to make sure that we go in the deepest details possible with our auditors because there is nothing that excites me more than prove that we were always right. We had our Latin in 2024 going out there saying Tether has the money. We are releasing a quarterly attestation from a very reputable auditing firm called BDO. They are international. So there are many, many different independent validators of our reserves. But, you know, we just want to get the full audit done.
