Dialogue with Tether USAT CEO: Experiencing the acceleration of U.S. crypto policies, user experience is the biggest difference in the clear legislation.

Source: Anthony Pompliano Podcast

Compiled by: Felix, PANews

Bo Hines, CEO of Tether USAT (a US-regulated, dollar-backed stablecoin launched by Tether), is also a former White House cryptocurrency advisor who participated in shaping US digital asset policies during key industry development periods.

Recently, Bo Hines was interviewed at the New York Bitcoin Investor Week, where he disclosed details of his involvement in cryptocurrency policy work at the White House and discussed topics such as the widespread adoption of stablecoins and why user experience is more important than returns.

PANews has summarized the highlights of the conversation. Here are the details.

Host: You previously worked at the White House and are now the CEO of Tether USAT. When I think about your significance in the crypto industry, a few major events come to mind. One of them is your role in pushing the Bitcoin strategic reserve. You helped achieve a lot of transparency in the current administration’s crypto policies (a pun referring to the “Clear” Act). Tell us about your experience managing crypto affairs at the White House. When you left to join Tether, how did you view the accomplishments you made?

Bo Hines: That was a very enjoyable time. With David involved, we aimed to move at “tech speed,” and I think we succeeded. Patrick was the deputy at the time and has now taken over my previous position. We tried to accomplish as much as possible at lightning speed. Considering the nature of political cycles, we felt we had to seize the momentum early, and we did. The biggest initial challenge was deciding which bill to prioritize—there was a debate between the Genius Act and the Clarity Act.

Obviously, we successfully passed the Genius Act in July last year, but discussions around the Clarity Act are still ongoing. We established the strategic Bitcoin reserve through an executive order, and the President’s Digital Asset Working Group report was also released—this is the most comprehensive digital asset regulatory framework to date.

With the Genius Act in place, stablecoin regulation provided us with the necessary on-ramps and off-ramps to realize the dream of a 24/7 market. I enjoyed my time there. After the Genius Act passed, I felt it was time to leave. I played a bit of a “bulldozer” role in that bill, so it was good to have a new face take over in the next phase. After the bill was enacted, I decided to step down, which eventually led me to become the CEO of USAT.

Host: Speaking of the Clarity Act, everyone is very interested in whether it will pass. Someone said yesterday that the probability is about 60%. How important is this for the industry? If it doesn’t pass, can everyone still get by?

Bo Hines: I think it’s extremely important. It’s the final piece of the overall blueprint. I believe the chances of it passing are between 80% and 90%. Only some minor details remain to be finalized, mainly regarding user experience (UX) structure.

The media has been discussing the yield debate between banks and crypto natives. I truly believe this is not a yield competition but a user experience competition. That is, whether you must be a bank licensed by the OCC (Office of the Comptroller of the Currency) and whether you need an independent platform to pass yields to customers. This mainly involves a single industry participant. Most players in the crypto space have now reached consensus, and banks are beginning to realize that stablecoins are here to stay, with integration about to start. I believe David and Patrick will find the perfect balance.

Host: Let’s talk about USAT and what you’re working on.

Bo Hines: Tether is undoubtedly a key player in the crypto ecosystem. We currently have about 530 million customers, with quarterly growth of around 30 million. We are the 13th largest gold holder globally. Internally, Tether is also a staunch Bitcoin maximalist. It’s a very unique company: only 300 employees, aiming for $10 billion in profit by 2025. In the new world set by the Genius Act, we plan to launch a US stablecoin product that meets the standards of the Act, serving institutional clients.

Our goal is to leverage these 530 million global users to connect emerging markets with the US capital markets. Tether is not just a stablecoin company but also an active investor in technology sectors like robotics and infrastructure. For Bitcoin enthusiasts, the integration of stablecoins is a huge benefit because it provides a seamless on/off ramp for buying and selling Bitcoin and other assets.

Host: Calling Tether a major tech investor might still be conservative. Every time I talk with Paulo, I learn about the latest developments in brain-computer interface companies and other projects. Can you briefly describe the benefits of building these channels? What goals are US institutions currently unable to achieve due to technological gaps? Or how do you pitch these channels to them?

Bo Hines: Transferring funds in the US remains very inefficient. Our payment channels are about 95% more efficient than in other parts of the world, but costs are still high, and large transfers are limited by time windows.

Stablecoins will fundamentally change this. From a settlement perspective, whether intra-bank or cross-bank, they enable banks like those in Korea to participate in US capital markets even after hours on Fridays (post-market close), thanks to the settlement mechanism.

The current competition is about infrastructure. You need to build a blockchain capable of supporting this scale at low cost. Institutional adoption of stablecoins can save costs for banks and merchants. Settlement cycles will shift from T+2, T+1 to T+0.

For consumers, it’s an excellent remittance tool. In the future, payroll companies might directly pay salaries in stablecoins. You could programmatically set it so that 10% of daily wages are automatically sent to Latin America or Asia. Our goal is to significantly change this cost structure in the coming years.

Host: Let’s discuss stablecoin yields, which are often debated and involve trade-offs.

Bo Hines: Regarding yields, Tether remains neutral. Our business model isn’t based on distributing yields; we provide the deepest liquidity and best distribution capabilities. Our market cap is about $185 billion.

The core issue is: can you simultaneously be a broker, exchange, and bank? Some call this a “shadow bank,” which is why traditional banks are starting to feel uneasy and want to protect their turf. The solution is simple: obtain an OCC license. This allows you to share yields with customers just like a bank. The OCC is currently very active in issuing banking charters to crypto-native companies.

Host: What other financial services do you plan to offer to these 530 million users?

Bo Hines: I believe there will be large-scale integration of public blockchains and stablecoins over the next 5 to 10 years. Tether is developing a Wallet Development Kit (WDK). We see controlling the deposit channels as extremely important. You’ll see various financial services bundled into these wallets. Tether’s mission over the past 7 years has been to provide access to those who cannot directly access traditional financial tools.

Host: You mentioned again that you are Bitcoin minimalists. Specifically, how does Tether support Bitcoin?

Bo Hines: We love Bitcoin. Bitcoin is part of our reserves. We are deeply involved in Bitcoin mining, trading, and ecosystem development. Stablecoins are the “first step” for people to get involved with Bitcoin. Once users become familiar with on-chain transfers, their next step is often to choose Bitcoin as their primary investment. With the proliferation after the Genius Act, stablecoins will become the entry point for many into the digital asset world. We’ve already seen US banks allowing wealth managers to allocate Bitcoin positions; large-scale adoption is just beginning.

Host: How transparent is Tether and what about its reserves?

Bo Hines: Tether’s reserves are mainly composed of US Treasuries, gold, and Bitcoin. Currently, Tether is the 17th largest holder of US Treasuries globally (including all sovereign nations), and we plan to enter the top 10 this year. We are increasing the proportion of US Treasuries in our reserves to meet the compliance standards of the Genius Act.

Host: Do you have any concerns about the future?

Bo Hines: Privacy issues. This is what users desire, but it also needs to meet regulatory requirements. How to leverage this technology while protecting privacy will be a key topic in the coming years.

Host: What are the differences and synergies between USAT and the international version of Tether?

Bo Hines: Our goal is to achieve product interoperability. The international Tether (USDT) is issued by the issuer, while the US product (USAT) is issued through Anchory Digital Bank, a fully OCC-regulated US bank.

Their reserves are separate, but we can use technology to make the user experience seamless. Whether through the issuer or liquidity pools on exchanges, we are confident in enabling smooth cross-border operations.