- Tether partners with the TON Foundation to create an app combining communication and banking.
- The collaboration targets the demand for efficient cryptocurrency transactions, especially in emerging markets.
- Tether emphasizes compliance, asset freezing, and transparent reserves to ensure user confidence and regulatory adherence.
Tether, has joined forces with the TON Foundation to provide customers with the ability to make cryptocurrency payments through the widely popular Telegram encrypted instant messaging service. This collaboration aims to develop a multifunctional application that seamlessly integrates communication and banking features, revolutionizing the way individuals manage their finances.
Tether’s Vision: A Power App That Combines Communication and Banking
During an interview at the Token2049 crypto conference held in Dubai, Paolo Ardoino, the Chief Executive Officer of Tether, expressed his enthusiasm for the partnership by stating that they have the potential to create the world’s first genuine power app, one that serves not only as a communication platform but also as a bank account. This ambitious endeavor signifies a significant advancement in the convergence of technology and finance, offering users unparalleled convenience and efficiency.
The TON Foundation and Telegram’s History
Originally, the Open Network (TON) project was initiated within the confines of Telegram, the renowned messaging platform. However, due to regulatory issues, Telegram ultimately distanced itself from the project. The US Securities and Exchange Commission (SEC) alleged that Telegram’s token sale, known as “Grams,” violated federal securities laws. Consequently, Telegram and the TON Foundation agreed to return over $1.2 billion to investors and pay an $18.5 million civil penalty.
Despite this setback, Telegram and the TON Foundation maintain a close partnership. In February, Pavel Durov, the founder of Telegram, announced the company’s intention to share advertising revenue with users leveraging the TON blockchain. Steve Yun, the president of the TON Foundation, emphasized the desire to onboard more of Telegram’s vast user base, which exceeds 900 million, onto the TON blockchain and crypto wallet. The aim is to address the increasing demand for effortless and efficient money transfers, particularly in emerging markets.
Addressing the Demand for USD-Based Wealth Storage
Steve Yun highlights the significant demand, particularly in emerging markets, for storing wealth in USD (United States dollars). Given this demand, Tether’s cryptocurrency, USDT, which is backed one-to-one by reserves primarily invested in dollar-denominated assets, serves as an ideal solution. By integrating Tether’s stablecoin functionality into Telegram, users gain access to a secure and reliable means of storing and transferring their wealth.
Telegram’s Challenges and Tether’s Commitment to Compliance
Telegram faces potential challenges as it contemplates going public and strives to become a profitable entity. Additionally, Tether, being the most widely utilized stablecoin for illicit activities, has faced scrutiny regarding its potential involvement in sanctions evasion. Notably, both the US and UK authorities are currently reviewing over $20 billion worth of cryptocurrency transactions associated with Tether that passed through a Russia-based virtual exchange.
However, Tether remains committed to stringent compliance measures. The company collaborates closely with 124 law enforcement agencies across 40 countries and strictly adheres to sanctions rules outlined by the Office of Foreign Assets Control. Paolo Ardoino assures that Tether possesses the capability to freeze assets when necessary, upon the request of law enforcement agencies. Since its establishment in 2014, Tether has cooperated with law enforcement and successfully frozen $1.1 billion in funds.
Addressing Concerns and Enhancing Transparency
Critics have raised questions concerning the reserves backing Tether’s USDT, which currently boasts a market value exceeding $109 billion. In response, Tether paid a $41 million fine to the US Commodities Futures Trading Commission in 2021. Furthermore, it settled allegations of concealing losses and misrepresenting its reserves, leading to a ban in New York.
To enhance transparency, Tether now provides quarterly attestations regarding the assets that back its reserves. According to Ardoino, Tether holds over $90 billion in US Treasuries, ensuring that USDT’s circulating supply is fully covered at a rate of 106%.
Tether’s Financial Success and Diversification
Based in the British Virgin Islands, Tether recorded a remarkable profit of $6 billion in the previous year. Out of this substantial amount, $5 billion was allocated to its reserves, reflecting Tether’s unwavering commitment to redeemability. To bolster its financial position, Tether collaborates with Cantor Fitzgerald, gaining access to tens of billions of overnight reverse repurchase agreements.
Tether has also allocated $1.3 billion of its profits to various initiatives, including investments in crypto mining, research, and artificial intelligence. Furthermore, the company recently underwent restructuring, establishing four divisions known as Data, Finance, Power, and Education (Edu(cation)). This restructuring reaffirms Tether’s dedication to innovation and diversification while maintaining a prudent approach to financial management.
Conclusion
The collaboration between Tether and the TON Foundation represents a significant milestone in the evolution of digital finance. By integrating Tether’s stablecoin functionality into Telegram, users gainaccess to a powerful application that seamlessly combines communication and banking services. This innovative solution addresses the growing demand for efficient and secure cryptocurrency transactions, particularly in emerging markets. Tether’s commitment to compliance, asset freezing capabilities, and transparent reserves backing USDT offer users peace of mind and reinforce the company’s dedication to regulatory standards.
Disclaimer
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from CryptoNewsBytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from any company.
