ADDRESSING THE STABLECOIN FUD WITH PAOLO ARDOINO, CTO OF TETHER (USDT)

Last updated: June 19, 2025, 19:03 | Written by: Brian Kelly

The world of cryptocurrency is no stranger to volatility and, with it, the ever-present specter of FUD: Fear, Uncertainty, and Doubt. The stablecoin pool ideally has a weightage comprising 33.3% of USDT, USDC and DAI; however, on June 15, the USDT weightage rose above 70%. The stability of Tether (USDT), the prominent stablecoin in the crypto market, faced a momentary disruption on June 15 as it deviated slightly from its long-standing one-to-one peg to the United States dollar.This is especially true for stablecoins, digital assets designed to maintain a stable value, typically pegged to a fiat currency like the US dollar.Among these, Tether (USDT) stands as the most prominent, and thus, a frequent target of skepticism.But what exactly is USDT, how does it work, and is the FUD surrounding it justified?Paolo Ardoino, the CTO of Tether (now CEO), has been at the forefront of addressing these concerns, offering transparency and insights into the mechanisms behind USDT and the challenges it faces. Paolo Ardoino, Tether s former CTO who is now the CEO of the leading stablecoin project, recently highlighted the company s significant earnings and emphasized the global use of USDT as a hedge against inflation. Ardoino told the Wolf of All Streets Podcast that Tether (USDT) has grown inFrom battling hedge fund attacks to navigating regulatory scrutiny, Ardoino's open communication provides a valuable perspective on the state of stablecoins. Paolo Ardoino, the chief technology officer of the most popular stablecoin, Tether (USDT), breaks down how stablecoins work and responds to frequently asked questions about them. Cointelegraph s Twitter: @Cointelegraph Cointelegraph s website: cointelegraph.com The views, thoughts and opinions expressed in this podcast are its participantsIn this article, we'll delve into the core issues surrounding Tether, exploring Ardoino's perspective on market rumors, reserve backing, and the future of stablecoins in a rapidly evolving financial landscape. Ardoino also shared a FUD meme addressing the market rumors surrounding Tether s depeg. Markets are edgy in these days, so it s easy for attackers to capitalize on this general sentimentWe'll also explore concerns that have prompted scrutiny from both the media and regulators, providing a balanced view of this crucial component of the crypto ecosystem. style .gatsby-image-wrapper noscript [data-main-image]{opacity:1!important}.gatsby-image-wrapper [data-placeholder-image]{opacity:0!important} /styleUnderstanding the realities behind the FUD is essential for anyone participating in the digital asset market.

Understanding Stablecoins: An Overview from Paolo Ardoino

To understand the FUD surrounding Tether, it's crucial to first grasp the fundamental concept of stablecoins. Tether chief technology officer Paolo Ardoino has confirmed that the stablecoin Tether (USDT) has been the subject of a coordinated attack by hedge funds looking to short-sell the UnitedArdoino, in interviews and online discussions, consistently emphasizes the core principle: stablecoins are designed to provide a stable, digital representation of fiat currency. In the seventh episode of Hashing It Out, Cointelegraph s Elisha Owusu Akyaw (GhCryptoGuy) interviews Paolo Ardoino, Tether s chief technology officer, about how stablecoins work, and the twoThink of them as digital dollars, euros, or yen, intended to be used in the same way but on blockchain networks.

He typically explains the process in these terms:

Pegged Value: Stablecoins are typically pegged to a fiat currency, most commonly the US dollar, at a 1:1 ratio.This means that one USDT is intended to be worth one US dollar.
Reserves: To maintain this peg, stablecoin issuers like Tether hold reserves.These reserves are meant to back the circulating supply of the stablecoin, ensuring that users can redeem their stablecoins for the equivalent amount of fiat currency.
Transparency: Ardoino frequently advocates for transparency in reporting on the composition of these reserves, aiming to build trust and confidence in the stablecoin's stability.

The key is that the value of a stablecoin is tied to something relatively stable (like the dollar).This allows users to participate in the crypto ecosystem without the wild price swings often associated with cryptocurrencies like Bitcoin or Ethereum.

The FUD Factor: Addressing Common Concerns about Tether (USDT)

Despite the core principle of stability, Tether has consistently faced its share of FUD. Ever known to be very vocal on Twitter, Ardoino said some hedge funds have been targeting the downfall of USDT, the world s first and largest stablecoin since the collapse of LUNA/UST.Ardoino has been vocal about addressing these concerns head-on.Let's examine some of the most common criticisms and how Tether has responded.

Is USDT Truly 100% Backed?

One of the biggest sources of FUD surrounding Tether is the question of whether it is truly 100% backed by reserves. Paolo Ardoino, the CTO at Bitfinex and Tether and a highly skilled computer programmer, recently noted that the fairly recent involvement of world governments in projects aimed at launching theirCritics often point to past controversies where the composition of Tether's reserves was questioned.

Ardoino addresses this by emphasizing the following:

Reserve Composition: Tether has made efforts to increase transparency regarding its reserve composition, providing regular attestations and breakdowns of the assets backing USDT.These reserves include a mix of cash, cash equivalents, short-term deposits, and other assets.
Shifting Strategy: Tether has been focusing on increasing the proportion of highly liquid assets, such as US Treasury bills, within its reserves.
Redemption Process: A crucial point Ardoino makes is that the true test of a stablecoin's peg isn't the price on an exchange, but the ability to redeem USDT directly from Tether for US dollars at a 1:1 ratio.

It's important to note that ""100% backed"" doesn't necessarily mean 100% in cash. Paolo Ardoino, the chief technology officer of the most popular stablecoin, Tether (USDT), breaks down how stablecoins work and responds to frequently asked questions about them.Cointelegraph s Twitter: @CointelegraphCointelegraph s website: cointelegraph.comThis podcast (and any related content) is for entertainment purposes only and doesThe reserves can include a variety of assets, but the key is that these assets are sufficient to cover all outstanding USDT and can be readily converted to fiat currency if needed.

Hedge Fund Attacks and Coordinated Short Selling

Ardoino has openly discussed the fact that Tether has been targeted by hedge funds engaging in coordinated short selling.These funds essentially bet against the price of USDT, hoping to profit from a potential depeg (a drop below the $1 peg).

His response has been multi-faceted:

Vocal Opposition: Ardoino has used social media platforms, particularly Twitter, to publicly call out these attacks and expose what he believes are erroneous beliefs driving them.
Defending USDT's Stability: He emphasizes that USDT has consistently proven resilient against these attacks, maintaining its peg even during periods of intense market volatility.
Highlighting Redemption History: Ardoino points to Tether's history of successfully processing billions of dollars in redemptions, demonstrating its ability to meet user demand even during periods of high stress.

He has argued that some of the FUD is driven by a misunderstanding of how stablecoins work and the strength of Tether's underlying infrastructure.

Regulatory Scrutiny and MiCA

Tether, like other stablecoin issuers, faces increasing regulatory scrutiny from governments and financial authorities around the world.The European Union's Markets in Crypto-Assets (MiCA) regulation, for example, introduces stricter rules for stablecoin issuers.

Ardoino's approach to regulatory challenges is generally one of engagement and adaptation:

Compliance Efforts: Tether is actively working to comply with evolving regulatory requirements in different jurisdictions.
Advocating for Clear Regulations: Ardoino advocates for clear and well-defined regulations that provide a framework for stablecoin operations while fostering innovation.
Understanding MiCA: He acknowledges the potential impact of MiCA and emphasizes the need for stablecoin issuers to secure the necessary licenses and maintain adequate reserves as stipulated by the regulation.MiCA requires stablecoin issuers to secure an e-money license and maintain up to two-thirds of reserves in independent banks.

Regulatory clarity is seen as crucial for the long-term growth and stability of the stablecoin market. Paolo Ardoino has played an important role in the cryptocurrency industry. As CEO of Tether and CTO of Bitfinex, he helped make USDt, Tether s stablecoin, a trusted digital asset. With his experience in software and blockchain, he has led key projects in tech and finance.Tether's ability to adapt to these evolving regulations will be a key factor in its continued success.

The Role of Bitcoin in Tether's Strategy

Beyond simply defending USDT, Ardoino has also emphasized Tether's commitment to Bitcoin. Tether CEO Paolo Ardoino addressed market concerns on social media, suggesting that FUD around Tether often is bullish for the crypto market, while dismissing the campaign as a poorly coordinated effort by competitors. Under MiCA, stablecoin issuers must secure an e-money license and maintain up to two-thirds of reserves in independent banks.Interestingly, this goes beyond just using Bitcoin for trading and investment; it involves integrating it into Tether's reserve strategy.

Here's the gist of the company's approach:

Bitcoin as a Reserve Asset: Tether has been exploring the possibility of using Bitcoin as a reserve for its profits. Tether is a blockchain-enabled platform that facilitates the use of fiat currencies digitally, disrupting the conventional financial system with a modern approach to money.This signifies a shift away from solely relying on traditional assets like US Treasury bills.
Supporting Decentralization: By allocating a portion of its profits to Bitcoin reserves, Tether aims to support the decentralization and growth of the Bitcoin network.
A Long-Term Vision: This move reflects a long-term vision where Bitcoin plays a more significant role in the global financial system.

This approach is not without its critics.Some argue that using Bitcoin as a reserve asset introduces a new layer of volatility, potentially undermining the stability of USDT.However, Tether sees this as a strategic move to diversify its reserves and align its interests with the broader crypto ecosystem.

Addressing Specific FUD Incidents

There have been specific incidents that have amplified FUD around USDT. The United States federal government is investigating stablecoin issuer Tether, The Wall Street Journal reported in an exclusive article on Oct. 25, citing people familiar with the matter.Let's examine one example:

The Curve 3pool Imbalance

On June 15th, a temporary imbalance occurred in the Curve 3pool, a decentralized exchange liquidity pool consisting of USDT, USDC, and DAI.The weightage of USDT within the pool rose above 70%, exceeding its usual 33.3% target. In data odierna, la stablecoin Tether si leggermente distaccata dal suo ancoraggio al dollaro statunitense a causa di uno scompenso avvenuto su 3pool di Curve.In seguito all'aumento del peso di USDT su 3pool di Curve, che ha superato il 70% rispetto al solito 33,1%, il prezzo di USDT ha corretto dello 0,3%, registrando circa 0,997$.This led to a slight depeg of USDT, with its price briefly dipping to around $0.997.

Ardoino addressed this situation directly:

Explanation: He explained that the imbalance was due to market dynamics and increased selling pressure on USDT within the 3pool.
Emphasis on Redemption: He reiterated that despite the temporary price fluctuation on the exchange, USDT remained redeemable for $1 directly from Tether.
Market Sentiment: Ardoino pointed out that markets were particularly edgy at the time, making them susceptible to FUD-driven reactions.

This incident highlights the importance of understanding the difference between exchange prices and the actual redeemability of a stablecoin.While exchange prices can fluctuate due to supply and demand, the key factor is whether the stablecoin issuer can maintain the 1:1 peg through direct redemptions.

Paolo Ardoino: A Key Figure in Navigating the Stablecoin Landscape

Paolo Ardoino's role as CTO (and now CEO) of Tether has been instrumental in shaping the company's strategy and response to market challenges.His background as a skilled computer programmer and his experience in both software and blockchain technology have been critical in leading key projects within Tether and Bitfinex.

His approach is characterized by:

Transparency: Ardoino prioritizes open communication and transparency in addressing concerns about Tether.
Technical Expertise: His deep understanding of blockchain technology allows him to effectively explain the technical aspects of USDT and address technical criticisms.
Vocal Advocacy: Ardoino is a vocal advocate for Tether and the stablecoin industry, using social media and other platforms to defend USDT against attacks and promote its benefits.

He has essentially become the face of Tether, actively engaging with the crypto community and addressing FUD head-on.

The Future of Stablecoins: Ardoino's Vision

So, what does Ardoino see as the future of stablecoins? Paolo Ardoino s frank and open conversation with CryptoSlate gave insights into Tether s battle with FUD from powerful adversaries and its commitment to Bitcoin, stating that it was focused on using Bitcoin as a reserve for profits rather than stablecoin backing.His vision encompasses several key aspects:

Wider Adoption: He believes that stablecoins will continue to gain wider adoption as a key component of the digital economy, facilitating seamless and efficient transactions.
Innovation and Development: Ardoino emphasizes the importance of ongoing innovation and development in the stablecoin space, exploring new use cases and improving existing technologies.
Regulatory Clarity: He sees regulatory clarity as essential for the long-term growth and stability of the stablecoin market, providing a clear framework for issuers and users.
Global Accessibility: Ardoino has highlighted the global use of USDT as a hedge against inflation in countries facing economic instability.This points to the potential for stablecoins to provide financial access to underserved populations.

Ultimately, Ardoino believes that stablecoins have the potential to revolutionize the financial system, making it more efficient, accessible, and inclusive.

Addressing the Stablecoin FUD: Key Takeaways

Addressing the FUD surrounding Tether (USDT) and other stablecoins requires a nuanced understanding of their underlying mechanisms, reserve composition, and the challenges they face.Paolo Ardoino's perspective offers valuable insights into these issues.

Here are some key takeaways:

Understand the Basics: Stablecoins are designed to provide a stable, digital representation of fiat currency, typically pegged at a 1:1 ratio.
Scrutinize Reserves: Pay attention to the composition of stablecoin reserves and whether they are sufficient to cover outstanding supply.
Focus on Redemption: The true test of a stablecoin's peg is its ability to be redeemed for fiat currency at a 1:1 ratio.
Be Aware of FUD: Recognize that stablecoins are often targets of FUD, and it's important to critically evaluate the sources and motivations behind the claims.
Stay Informed: Keep abreast of regulatory developments and their potential impact on the stablecoin market.

By understanding these key aspects, users can make informed decisions about their participation in the stablecoin ecosystem.

What Now? Paolo Ardoino, the chief technology officer of the most popular stablecoin, Tether (USDT), breaks down how stablecoins work and responds to frequently asked questions about them.Cointelegra Since the depegging of TerraUSD (UST) in 2025, consumers have become more critical of how stablecoins work.Embracing Informed Decision-Making in the Stablecoin Market

The world of stablecoins is dynamic and complex.Understanding the FUD surrounding Tether (USDT) and other stablecoins is crucial for anyone participating in the cryptocurrency market.By staying informed, scrutinizing reserves, and understanding the redemption process, you can make informed decisions and navigate the stablecoin landscape with greater confidence.Do your own research, understand the risks, and embrace the potential of this evolving technology.