Tether CEO Dismisses "Stablecoins Struggle to Support Large-Scale Payments" Argument: Stablecoins Are 100% Backed, Banks Only Have Fractional Reserve Swear By

BlockBeats News, August 30th, Tether CEO Paolo Ardoino responded to the statement made by the Bank for International Settlements (BIS) President, who believed that stablecoins were not sufficient to support large-scale payments and instead supported tokenized bank deposits. Ardoino made a structural comparison between the two: stablecoins are backed by 100% liquid assets (such as government bonds), while tokenized bank deposits are essentially "fractional reserve," usually uninsured bank deposits with liquidity asset reserves often only around 10% in fractional reserves. What BIS is truly concerned about is not whether stablecoins can be used for payments, but that stablecoins have exposed the "emperor's new clothes" of the traditional banking system.

Ardoino then raised two questions: Since stablecoins are fully reserved, why put savings into fractional reserve products? If people realize that stablecoins are safer and start migrating their savings there, what will happen to the financial system? Ardoino directly targeted the fractional reserve model of the traditional banking system.