Tether CEO Rebukes BIS And Warns Tokenized Bank Deposits Lack Real Liquidity

TL;DR:

• Tether defended stablecoins against the BIS, which claimed that tokenized bank deposits are better substitutes for fiat money.
• Paolo Ardoino argued that stablecoins are safer because they are fully backed; tokenized deposits only hold 10% in liquid assets.
• The dispute reveals banks’ fear that the CLARITY ACT could trigger a massive migration of deposits into stablecoins.

The CEO of Tether, Paolo Ardoino, responded sharply to statements made by Pablo Hernandez de Cos, Director General of the Bank for International Settlements (BIS), who argued that stablecoins do not constitute an effective substitute for fiat money.

De Cos listed among his criticisms the low redeemability, issues with supply and interoperability, and the facilitation of illicit activities. He also promoted tokenized bank deposits as a more direct path to harnessing tokenization without compromising the foundations of the monetary system.

Stablecoins -> instrument 100% reserved by liquid assets (ie. treasuries)
v.s.
Tokenized bank deposits -> pinky swear uninsured bank deposits (usually only 10% reserved by liquid assets).

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