The Wolf Of All Streets - How Tether Is Driving True Crypto Adoption While Making $6B Net Profit A Year | Paolo Ardoino

Episode Date: February 11, 2024

In this Episode of The Wolf Of All Streets podcast, Paolo Ardoino, CEO of Tether, discusses how the most popular stablecoin is driving crypto adoption worldwide while generating over $6 billion in net profit in 2023, thereby positioning it as one of the most profitable companies per employee. Paolo Ardoino: https://twitter.com/paoloardoino ►► Sponsored by iTrust Capital Invest in Bitcoin, Crypto Assets & Gold with Your IRA Using iTrust Capital. 👉 https://bit.ly/itrust-scott ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/ ►►OKX SIGN UP FOR AN OKX TRADING ACCOUNT THEN DEPOSIT & TRADE TO UNLOCK MYSTERY BOX REWARDS OF UP TO $60,000! 👉 https://www.okx.com/join/SCOTTMELKER ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. USE CODE ‘2MONTHSOFF’ WHEN VISITING MY LINK. 👉 https://tradingalpha.io/?via=scottmelker ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/ ►►NGRAVE This is the coldest hardware wallet in the world and the only one that I personally use. 👉https://www.ngrave.io/?sca_ref=4531319.pgXuTYJlYd ►►NORD VPN GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets ►►COINROUTES TRADE SPOT & DERIVATIVES ACROSS CEFI AND DEFI USING YOUR OWN ACCOUNTS WITH THIS ADVANCED ALGORITHMIC PLATFORM. SAVE TONS OF MONEY ON TRADING FEES LIKE THE PROS! 👉 http://bit.ly/3ZXeYKd Follow Scott Melker: Twitter: https://twitter.com/scottmelker Web: https://www.thewolfofallstreets.io Spotify: https://spoti.fi/30N5FDe Apple podcast: https://apple.co/3FASB2c #Bitcoin #Crypto #Tether Timestamps 0:00 Intro 1:24 Tether’s massive profit 2:51 iTrustCapital 3:49 Tether’s reserves 5:12 Cantor Fitzgerald 6:33 Wall Street & crypto 9:57 Tether’s geography 13:09 Tether & USD 14:47 Crypto adoption in Argentina 20:47 L1s: Ethereum & Tron 25:57 2024 vs 2017 29:02 The future of Tether 31:22 Other currencies and Tether 34:42 El Salvador 37:21 Gaming and USDT 39:27 Next narratives 43:05 Wrap up The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

We're able in 2023 to average around $4 billion in net operating profits. So it's definitely cool to be able to say you made more money than BlackRock and Goldman Sachs and all these people. Yes. Right. So that's also why not all the banks are happy with what we are doing, just because we are showing that you can make good money and not be greedy and not risk customers' assets. And not be insolvent. $6.2 billion. That is a very large number. And it is exactly how much money Tether made in 2023. By my count, that's more than BlackRock, Netflix, Uber,

Goldman Sachs, Disney. How did a company simply minting stable coins and investing in United States treasuries become such a monster behemoth and what's coming in the future? I spoke with one of my favorite guests, a very frequent guest, because we just talk about these huge billions in numbers on a regular basis. Paolo Arduino, the CEO of Tether. You guys don't want to miss this. We talked about, obviously, how they're making so much money, what's coming in the future,

and how these stable coins are actually being used to save lives and help people on the ground. As we're about to record this, I got an email from my friend Alex Tapscott, who writes a digital asset digest. Story of the week. USDT stablecoin issuer Tether releases 2023 attestation report. 6.2 billion net profit. Tops BlackRock, Netflix, and Uber. And Disney.

And a lot more people. I mean, it's just getting crazy now, man. Yeah. Yeah. Yeah. Incredible times. Incredible times. So still with a very exceptionally simple business model, correct? I mean, we're just benefiting massively from high-yielding treasuries at this point.

Yeah. Look, the composition already serves. I mean, I think that Tether still today is not mostly known for USDT. That is, you know, the main product that we have. And USDT is the biggest stablecoin in the market. So the composition of its reserves is public. It's something that is well written, displayed in the attestation. We were able in 2023 to average around $4 billion in net operating profits.

So it's basically US TBL's interest. And then the rest, also $2.2 billion more, is the result of our gold and Bitcoin investments that were perfectly timed and made some good profit as well. Crypto investors in the United States face some major challenges. One of them is that there's almost no way to get exposure to the asset class inside of your traditional investment vehicles. The other thing is the taxes.

They are absolutely atrocious. What if I told you there was a way to solve both of these problems? Well, there is. And it's with a self-directed IRA from I Trust Capital. Guys, not only can you open a new self-directed IRA and fund it with the limits each year, but you can actually convert over from your 401k, your Roth IRA, any other IRA that you already have and you can do that tax-free just transferring over the balance and then you can go to cash, buy as much Bitcoin

than you want and not pay taxes when you sell it. You absolutely have to try this if you are in the United States. Use the link down below. It's bit.ly slash itrust-scott. That's B-I-T dot L-Y slash I-T-R-U-S-T dash S-C-O-T-T. You have to try this now. So then how large now is your corporate reserve on top of the reserves that back, obviously, Tether, the Bitcoin, gold investments, cash, etc.? Yeah, it's now $5.2 billion. Just to be clear, these are, as you said, on top of the 100% reserves that Tether keeps in order to back all the issued tokens. And it's exciting because I always say that Tether is a really peculiar company. Most of the companies would have distributed those $5.2 billion across all the shareholders. We believe that our mission is so important that we have not only created a new way of making payments, a new way of holding dollars, a new way of having a checking account, but

also we created the first, if you want to call it in that way, the first over collateralized bank. So that's also why not all the banks are happy with what we are doing, just because we are showing that you can make good money and not be greedy and not risk customers' assets. And not be insolvent. Yeah, it's a nice place to be for a bank, and we've seen the bombs collapsing with more seemingly coming down the pipeline.

Another sort of surprise, I think, this year, a bank, and we've seen them obviously collapsing with more seemingly coming down the pipeline. Another sort of surprise, I think, this year, certainly for the Tether truthers, was to hear Kendra Fitzgerald, CEO, come out and say, yeah, we custody them. We've seen it. We know that they have it. This is Howard Luttnick, one of the most powerful people, obviously, in finance. Did you know that he was going to come out and make those sort of favorable comments about Tether or was that off the cuff? We discussed periodically. I think he is in the best position to see our research. Well, as he said, we keep the vast majority of our T-bills with Cantor.

And also Cantor spent really almost two years in doing due diligence on Tether. So I think it was amazing to see such an important person that has seen the world of finance growing and changing throughout the last few decades, coming out and speak positively about the work that Tether has been doing. So we are super excited and grateful for what he said publicly in Bloomberg. It seems that he's legitimately excited about the asset class. Not necessarily even being asked about it. He brings it up.

Larry Fink sort of doing the same thing. What do you make of this very clear sort of transition for a lot of these CEOs of the largest financial companies in the world starting to really talk favorably about this asset class? So it shows that the work that our community for many years did in terms of bringing legitimacy to this asset class, starting from Bitcoin with the ETF approved this year and stable coins, the incredible growth of stable coins has finally paid off. I think, you know, until really recently we have seen still so many articles describing bitcoin as an instrument for only for bad people um stable coins were not really understood from the banking industry i had so many discussions throughout my career at tether trying to explain to bankers how

how usdt was working and and why it was so important Rightfully say that it's easy to discount the importance of stablecoins and USDT if you are thinking only about the US, the United States. In the United States, you have the best dollar rails. You have everyone, almost everyone has a debit card, a credit card, has a mean of payment, has access to financial services, can get a loan. That's something that is extremely rare. If you try to find the same situation outside of the United States, you go in Argentina, you go in Vietnam, you go in Brazil, you go in Mexico, you go in all these countries, they don't have the same access. They don't have the same tools.

So from a banker point of view, looking only at your small pond, well, not small, it's a huge pond, but it's smallish when it comes to geography and number of people. The US is around 350 million people, across 8 billion people living in the rest of, well, total 8 billion people living in the rest, well, total 8 billion people living in the world. So it's not negligible, but it's not representative of the necessities of humanity. So with Tether, we are presenting a chance for all the people that are living in emerging markets

in developing countries to have access to a checking account. I mean, I'm pretty sure that all your friends have a checking account, a savings account access to a checking account. I mean, I'm pretty sure that all your friends have a checking account, a savings account, have a bank account. I mean, the rest of the world doesn't work like the US. That's what we have been keeping saying. If I think about the usage of USDT in the US or in Europe, it doesn't make any sense. There is not much usage.

The clear interest in USDT comes from all those countries that have a high inflation rate. They, again, they are left alone by the banking system. Correspondent banks don't want to touch these countries with a 10-foot pole, not because they are bad countries or they are sanctions, of course, sanctioned countries, just because it's not profitable. It's not profitable to have people, to onboard people in banks that have $50, $100 in their bank account. No, they're not interested. They're not there. They're not making enough revenues. They cannot be justified to the shareholders of these banks. With Tether, it's different. You have a smartphone, you have a

wallet, you have a checking account. And if you want, if you have a little bit more money, you can also start growing your savings account. So what countries are you seeing the largest uptake in at this point? Obviously, we know Latin America. You've mentioned a few. I've heard that Nigeria is really, really heavy on crypto adoption in general. Bitcoin is a store of value, but Tether as their means of transacting on a day-to-day basis. I mean, I think 40% of their population is under 15 and the bulk of them have digital wallets of some sort. Yeah, I think from what we are seeing, South America, clear evidence is Argentina, is almost completely tetherized. The thing is that not everyone knows the term tether in Argentina, right? But everyone knows the term USDT.

So they think they consider it the digital dollar. For them, it's the digital dollar. So they are not using USDT for, you know spent an enormous amount of money in making its brand great in Argentina. They just need a dollar because their national currency, the Argentinian pesos, is going down the bin. And that's the only thing that they need to know and they want to know. And that's something that they are using in their day-to-day lives. And, of course, our main interest at Tether is making sure that these guys have the confidence in using USDT as a product. And that's one of the main reasons to also keep this further $5.2 billion as a part of our excess reserves.

Well, then you ask me which other countries, and then there is Brazil. Brazil is also another extremely important country. Venezuela, we see a lot of adoption of USDT. We are seeing Vietnam and Nigeria is definitely growing. And maybe you call me pessimistic, but the world is not going to become better anytime soon. I mean, if we have seen the last few years, it's definitely on a path towards decline rather than a path towards improving GDPs of countries.

No, no. We are going to see more and more countries actually having problems and defaulting on their debt rather than improving and making or escalating top of the charts of the highest GDPs. I think that, unfortunately, USDT is going to be more and more important for more and more countries in the future. A message that I try to give also in general is of this, Tether has, in my opinion, two fundamental values. One, as I said, for the emerging markets, developing countries, all these communities that they don't have, they are not served by banks. And the second one is actually to the US. My opinion, although we don't serve US customers,

I think, you know, remember that earlier I said that Tether invented, you know, two things, basically a new way

to have, you know, to transact money. Fiat money also invented, you know, the fully reserved banking.

And the third one is, you know, the US always tried to have the US dollar as the most powerful currency in the world and it still is. And there is or purchase one USDT, with that dollar that we get, we buy U.S. treasure bills. So in the past, when the U.S. always tried to push the dollar as the main currency we use in the world, that happened through cash or through banking and so on, but either those

were synthetic dollars or was cash. So there was no direct reflection of that into purchasing the U.S. debt. This is the first time in history that we, that private company, create a product that is used by hundreds of millions of people that have a direct correlation of purchasing with every holder we can purchase debt. And with the increased number of holders, with increased market cap, we are actually purchasing US debt. So I think this is why not only Tether is cool because it's making a lot of money. That's great. But I think the history of innovation keeps going and is becoming evident every single day it passes.

It's definitely cool to be able to say you made more money than BlackRock and Goldman Sachs and all these people. Yes. I think you can smile for that one. So listen, we talk about the adoption of a stablecoin in a country like Argentina. What does that actually look like? Now, I know a lot of people maybe work for companies that aren't in Argentina, work on the internet, they get paid in dollars, they're storing their

value, immediately moving their pesos into them. But what does it actually look like on a day-to-day basis? Are they spending those at grocery stores? Are they spending them for their gym membership? Are they putting gas in their car using Tether? How are they actually using it on the ground? Yeah, I mean, if you take the specific example of Argentina, we recently collaborated with a crypto market. They have one of the main markets, you know, physical markets in Buenos Aires,

starting to accept USDT for daily purchases, right? There is a fish market, there is a meat market, you know, vegetables, fruit, whatever. You can see already the usage of USDT being used for any normal day-to-day purchase. But also, I know taxi drivers are accepting USDT. I know that barbershops are accepting USDT. So the word of mouth, when it comes to the success of USDT, I wish I could tell you, oh, we were great. We spent so much money in making our brand so known. No, it's word of mouth.

People are looking around. They're trying to find good solutions to hedge themselves and protect their families, their family savings. And if they find something that works, they tell all their friends. That is exactly how it worked for us.

That makes perfect sense. I think I'm just trying to get to the bottom of whether they have to convert back to their local currency to actually spend so are they using it even more as a store of value than for transacting i think it's a bit of both i mean we especially in argentina we are seeing that use it you know both as a check in a savings account so while in other countries, it's maybe a bit more like a checking account, but definitely saving their savings is really important in a scenario where your national currency loses 80% of value year after year against the dollar. And also, when you cannot use USDT as a checking account, of course, there are plenty of exchangers where you can go and convert USDT into your local currency. And I also want to add something on this specific topic, right?

Because it's clear that if you go in Argentina or in many of these countries, for cash dollars, there was a black market that was heavily expensive if you want to convert national currency to the US dollar. What is happening with USDT being allowed on local exchanges that actually the spread between the US dollar and the markup between the US dollar and the national currency is much lower. So we are also having that sense digitalizing and making this process more efficient. We are actually helping people to save further money. So that is another incredible story. And to save the dangerous process of going on the black market

and exchanging physical cash in large quantities. Physical security is definitely improving. Yeah, I mean, anecdotally, one of my best friends is American, moved to Argentina, Physical security is definitely improving. money to the bank, going and putting it on the black market, getting dollars, going back to the bank and putting it in a safety deposit box as dollars instead of actually depositing it into the bank. Now he uses Tether, right? Talking about an American guy who's a, you know, Wharton graduate who uses Tether on the ground in Argentina every day. You know, the issue is that in Argentina, people don't trust the banks, right? So they don't want to keep even the dollars in the bank account because the dollars, you can only keep a certain number of dollars or purchase a certain number of dollars per

month through your bank. And also there is a history and the risk of if the banks or if the national currency goes in default, then the banks are allowed to take out the money in every single form from your bank account. So people are resorting back to cash in some cases. That's not great. That is not living 2024. People want to have access to their finances

anywhere in the world, wherever, in any time they want. The beauty of having access in anywhere in the world, wherever, in any time they want. The beauty of having access in anywhere in the world to your finances, just remembering 24 words, is one of the best innovations that humanity ever created. So it's freedom just in 24 words. Yeah, and I think, listen, we've talked about this before, so we won't beat it to death.

I think even you hope that a lot of people make the same jump to Bitcoin, but it's nice that they're making the jump at least first to Tether, which they'll be able to transact. And I think it'd be nice if they viewed Bitcoin as their savings account and, I think dipping their toes into Bitcoin will be much easier. And there are many good digital wallets that will make it possible and easy. Of course, I always recommend caution and being educated, understanding what you're doing and why Bitcoin is important

and why Bitcoin is important and why Bitcoin is actually the ultimate form of money that humanity ever created. But I think it's a good start. And we as Tether, we are actually educating people on how to use Bitcoin and why Bitcoin is so important. We're seeing a number of different layer ones sort of emerge, all of these layer 2s on Ethereum. How do you actually keep up and make sure that Tether is accessible and can be bridged between, or is that not really your concern? They figure it out and the market sort of decides and the winner wins. I mean, we know that even still, with all the negativity people have towards Tron, people

use Tron a lot to transact in USDT because it's cheap and fast. Look, this is always a fascinating part of our talk because I remember also last time we touched base on this. Look, I think, first of all, there are so many new layer ones that feels like 2017, honestly. Some wonder what year is today.

But I get constantly approached by managing groups of different layer ones. They all ask to have Tether, USDT, issued on their chain. And also layer twos, right? The issue, if you look at the distribution of usage of USDT, there are two clear winners. One is Ethereum, because it's the father of smart contracts. And then Tron that has created this cheap, fast settlement layer for payments. There is, you know, the Ethereum, again, has a lot of first mover advantage when it comes

to building cool projects, you know, that have access to smart contracts and so on. But for so many years, their transaction fees were terrible. And the first serious ZK roll-up happened in, I think, 2022. So while Tron started to work as an EVM-compatible layer-one solution with fast settlement, cheap cost of transacting since 2018. So for four years, Tron has had first mover advantage. People sometimes ask me, oh, why are you using so much Tron?

It's not me. People have the freedom of swapping from one chain to another. And also, we actually issued, notably, USDT on more than 10 different blockchains and actually the concentration is, again, heavily on Ethereum and Tron. So even, we are, of course, looking to other chains on top of which we want to issue, but it is 2024.

So we are not looking at who has, you know, an ecosystem for DGENs, who has the best DeFi ecosystem in 2024. So we are not looking at who has an ecosystem for DGENs, who has the best DeFi ecosystem in 2024. We are looking for blockchains that have real world ecosystem, that are connected to successful wallets or successful apps. Blockchains that have already a distribution mechanism that is global. Because anyway, we could issue USDT on 100 different chains. First of all, from a pure technical and security point of view, it's a bad choice because it makes our company… Every time you add a blockchain, you have to have a dedicated team that ensures that the security of the blockchain remains up to par, and you have to make sure that there are no issues with the smart contract and so on and so forth.

So it's a huge overhead for having two, three, four million USDT issued on that chain. It's not worth the risk. It's not worth the time. So that's what we are trying to explain. Yeah, it's the same reason an American bank doesn't want to go sign up a bunch of customers in Ghana. But it actually makes sense. If there's no financial incentive to do so and it doesn't make sense, it's just a bad business decision. Yes. And what happens is that the difference is that, of course, on one side, you have the poor person in Ghana that would need a tool like this,

but in fact, they're using USDT. And on the other side, listing USDT on a certain chain that doesn't have any actual usage would just make reach the chain developers. I mean, there is no point for us, right? So we want to have our customers, our user base are the poor people

in the developing countries. Our customer base is not, you know, the DGEN or the DGENs or our, you know, the people that are, you know, building every single day a new chain. I'm sorry to say that in this way, but I think it's important that this industry grows towards a more, a brighter future with actual real-world usage.

Gaming is going to be quite important for sure, but done in a proper way. So I don't see any blockchain in this moment being able to serve the incredible needs of gaming. Gaming, I mean, all the different assets that you have in a game, that in-game transactions, I mean, no Solana, no other chain can support that scale. So you need to find better solutions. And still today, I mean, we are still seeing meme coins as the main driver for volume on the different main layer ones. It's a little bit sad, I must say. Meme coins and airdrops. Yes. Again, it's 2017.

It's not 2024. I feel like every time I wake up, I have to check my other calendar. So how many, right, it is very similar to 2017. I've been sort of critical of the airdrop and meme coin culture myself, obviously, because I think it inflates the numbers and the TVL and you don't get a real picture of how successful any of these chains are.

If it's like 2017, we know that almost everything is going to fail, right? You can only have a few winners. So aren't you obviously sort of just choosing who you believe from a pragmatic, like, you know, statistical standpoint, whatever, who's going to win and sort of ignoring the others because there's a viable chance they might not survive? Yes, that's exactly my point, right? So we want to reward who has a pitch towards us that is a 2024 pitch you know about creating a connection between uh people that uh that needs to receive payments and payments remittances could be gaming could be you know any sort of um

wallet that has a nice interface that doesn't propose to its users after two seconds a coin with a dog face on top of it so that is something that i believe it this is where we want to focus in this year right so creating rails and expanding usdt rails and that are gold by the way way, towards normal people. Like, because I'm, you know, any one of us can use tens of different chains, can bridge, can, you know, a farm, can do all these nice terms that we invented for ourselves. But the reality is that we are talking, if you are focusing on that crowd,

is 0.1% of the population, if you are lucky, right? The 99.9% of the population is people that are working as a barber, they're working as a hairdresser, driving taxis, driving buses, teaching at school. These are the people that need better solutions. And now banks are more and more expensive. You know, the cost of maintaining a bank account is going up and up. And if you sum that with the fact that someone at the World Economic Forum wants us to eat ants and crickets flower, then, you know, things get scary.

So we might not have so much time to develop the proper rails that are a bit more independent from the traditional old system. So I think that's where I think, you know, that's also one of the reasons why Tether is investing so much in Bitcoin and Bitcoin development, because we believe that that is the ultimate safety net for humanity. Did you go to Davos this year? No, the only time I went to Davos is I was outside of the Congress Center and I was giving out pizza, Bitcoin pizza, to the people that were entering the Congress Center.

Well, that's us, right? We really believe in the mission at Tether. Yeah, that's awesome. So you're at 96, 97-ish billion market cap now, right? How high can this thing go and how soon? I mean, at this rate of growth, it seems like pretty unstoppable. Will there be a time perhaps when there's some external force that naturally slows down the growth? I mean, for you guys, obviously, treasuries probably won't always have these yields. That doesn't matter for how many people are going to use Tether, but you won't make as much money.

I mean, or is this just basically hyper growth and continues because people need these dollars? Well, look, up to two years ago, we were making far, far less money. So for us, it's not about how much money we're making. Again, I'm being serious i'm for us it's about building cool things things that uh that remain in uh that can remain in the history of innovation when it comes to finance but not only that right so we have we are investing in ai infrastructure like with northern data in renewable energies in peer-to-peer telecommunications we we are not the classic vc that invests in hundreds of things that might make them money with Northern Data, in renewable energies, in peer-to-peer telecommunications.

We are not the classic VC that invests in hundreds of things that might make them money. We invest only in the things that we like, that we think that can change the world and are aligned with our vision of resiliency, decentralization, and so on and so forth. So how high can it go? I mean, the thing is that the US dollar doesn't have to be perfect in this world. The US dollar has to be just better than any other fiat currency. So the more countries will fail, the more countries will have issues with their national currency. It can go up to $200 billion, $300 billion, $400 billion, 300 billion, 400 billion, you know, 1 trillion. I think that eventually it will become part of, you know, the rest of the world, right?

Not again, US, I don't think US needs it again, and Europe probably not. But the more countries will fail, the more unfortunately, and this is, I say it with some sadness in my heart. The more countries will have problems, the more the market cap of USDT will go up. And it kind of sucks if you think about it. It does. And why, with this hyper growth in mind, have we not seen more adoption of Euro-backed stable coins or stable coins of any other currency?

Is it just because the dollar is so dominant and coins of any other currency? Is it just because the dollar is so dominant and that's what people want? Is it because you had a first mover advantage with dollarized stable coins? Why is it that we really haven't seen that uptake? Well, go anywhere in the world apart Europe and ask if they prefer the euro or the dollar. Because, I mean, euro is almost the little brother of the dollar, but really no one's won the euro, not even Europeans probably. And so, you know, it doesn't have the same protection, let's put it in this way, compared to the dollar.

And differently from the United States, Europe has been formed recently it's really hard i mean the the countries are you know looking in european countries are looking at each other with extreme suspicion they are you know kind of there are some big reveries unwilling alliance yeah yes it's like okay yeah we did this thing you know we we are kind of um you know europe now but you know my food is better than yours and uh you know my you know my one is better than yours and but i'm better at football and and you know jokes by the way you can say all of those things to americans and be correct almost no matter where you are better

food better football and better wine for sure well we have pretty good wine in napa and snow yeah i mean california i like italian wine yeah but see i mean it's europe is uh is is uh i'm fortunate i'm european right i'm italian then i see this with also sadness in my heart i don't see Europe as going to be. It was probably, you know, the fastest growing culture, you know, it's with the Greeks, Romans, you know, and we had the Renaissance in Italy. I mean, Italy was such a falling empire with the economy that is not really going in the right direction. There is a lot of political unrest. People are taking, are voting for right-wing parties more and more. We have seen this movie for, you know, a few times in the recent 100 years. Yes.

So it means that there is a lot of unhappiness. It's not, I'm not just, I'm really not making a political speech. It is what it is, right? There is unhappiness. And as much as, you know, some media are trying to talk this down, it is like that.

I mean, you can go in the streets, you can go in Milan, Paris, in London, the level of safety is so high, right? So it's not about just the currency. It's about society that is kind of unfolding in front of our eyes. Some people might not like what I'm saying, but it is what it is. When you work as a global level, it's when you see countries in South America that actually, and Central America, like El Salvador, that are working so hard to change their fate, right? So recently, a few days ago, Mr. President Najib Bukele was reelected with 85% of the votes in a democratic election, right?

No one contested the quality and the precision of that election. You see that people need stability, people need security, need to see that there is hope, that the country is trying to do better. It's difficult for a country to change, right? So it's really hard. But when you see a country that can get back on track and people finally can have a better life, they will support politicians. Politician jobs are so important, right? A good politician like Kele can make the difference in the country. And it's sad that so many politicians don't understand the potential, the power that they have in Do Good. And I believe that South and Central America will become the most important countries

in the next decade, alongside probably with India as well, that we see as a massive growing country. Did you hear his speech? Listen, I can't speak to the veracity of it. I haven't looked at the statistics. I know anecdotally that crime is massively down in El Salvador and that objectively,

it seems to be a much safer country. But it was an incredible speech. If you didn't see it, he basically made the point that, you know, we've cleaned up this country. It's the safest place in our entire hemisphere. And people are still criticizing us and attacking us. Worry about yourselves. Imagine you go in the streets. I mean, until, you know, I think early 2022, there was a curfew. People could not go out after 5 p.m. and have an ice cream. So imagine, it's not in just, you know, few remote parts of the country. Everywhere.

Imagine the lack of freedom that 99.9% of the population had. You know, yeah, he's being criticized, but now all those people can go up, you know, at night and have an ice cream. They're happy. They're smiling. I've been there. I'm seeing people. I'm seeing, I mean, I'm going there again in the next couple of weeks because I see the change is so beautiful, so refreshing, and we want just to support it because it's so unique in the recent history of humanity that we have to support it.

And it happens so fast. I mean, you just made the point that you go in the streets of almost any European country, Paris, for example, it's objectively more dangerous than walking down the street in El Salvador now. Oh, absolutely. It's so shocking to me that that's the case. I know we have limited time. I want to circle

back to your point on gaming, though, and talk about Web3 a little bit. Do you think that we have all these tokens, all these platforms, you use the token itself inside the economy, do you think that that could all be Tether? I think most parts should be Tether. But also, if you want to have a cross-game economy, I think it should be a stablecoin. And I really like the fact that if you have a helmet, it can be an NFT. I really like the fact that if you have a bag of gold, it can be tethered gold. And if you can trade iron in a game, it can be a token. What I don't like is

trying to create economies where people can get almost like cockroach or botanist where you enter you spend tens of thousands of real dollars and you you you are left with nothing that is kind of saddening again so shouldn't be my my only worry is that gaming and and game fi and and this is really important to modernize the world of gaming and make it more even virtual. I like now that there is the Apple Vision Pro. You can see how this can unfold in an incredible, beautiful future. But the risk of really creating environments where you can enter but never get out

because your money actually outside of that game is worth nothing and you spend hundreds of thousands of dollars in the game and by the way i was told with by by some game developers that there are people that that spend tens of thousands of dollars to create their cloud to create their following of real dollars to buy and now to thin air created currency so that that is astonishing. And again, a little bit saddening. So I wish we could settle towards a more realistic and future-proof and honest economy in games. But definitely the technology has to improve, but it's going to change dramatically the gaming world as well. We had all these huge narratives of the last couple cycles, right? DeFi, NFTs, gaming, Metaverse, you name it.

Do you think any of those are going to hit primetime in this cycle? Like that any of these are going to reach finally some level of mainstream adoption? Look, the issue is that takes time to develop technology. Okay, you can create all the tokens in a second, but the problem that is the integration of these tokens and the scalability of blockchains is not there.

So we need to work a lot and work hard on creating payment channels. So a little bit we're using technology similar to Lightning, but for tokens in order to make it possible, the scalability of in-game economies. So I think there will be some hype around GameFi in this cycle, but the hype will likely not be justified by the actual technological adoption and support. So it's not going to happen quite yet. Are there any narratives right now outside directly of what you're building that you do think can gain some level of mainstream adoption in this cycle? Real-world assets, any of it?

Or do you think that we're still a few years away? I think we're still a few years away, personally. I haven't seen the killer app yet. I mean, real-world assets, I believe that tokenized bonds and stocks are going to be an important part of the next four years. So I think they are a realistic thing for this cycle. And also AI, I mean, the amount of money, real money invested in AI and AI development

is going to be, is actually already massive. We are talking about tens of billions of dollars in investments in AI. You know, AI tokens is a big no, but actual real-world AI and its usage will dramatically also improve the speed of development in our field, right? Because my career, in my entire career, well, almost my entire career, I've been a developer, and I like to think that I was also a quite good developer. I mean, I created many things,

but the fact is that the quality also of these code pilots or these apps that allows you or allows people that don't know how to develop to write code is incredible. to think how they can stay ahead of the curve, right? And become always successful masters of new AI tools rather than full or potentially being replaced by AI. And so I think that, you know, the more AI tools that you have that also are developing code, they can fast track many of the projects that we discussed and can actually help, maybe not with the actual innovation,

and that's something that the human brain is still the best, but they can actually fulfill many of the boring parts of building software to expedite actually the results. So maybe, yes, at the end of the cycle, we are going to see some AI-created programs and maybe blockchains even that can that can actually fulfill the dream of scalability in the gaming world you know we're gonna see we're gonna see some really powerful ai coded meme coins that's my prediction well now you

can have a dog on a coin that can can speak whole new of dogs. A full kennel of meme coins, man. It's going to be, yeah, it's going to be wild. Listen, the bullish case, what I hear is we're still really early and there's still a lot of opportunity. And so I'll take that for crypto. Yeah.

Yeah. Awesome. Paolo, thank you so much. Once again, like I said, I think now you're officially way the most frequent guest on the Longform podcast. So I love talking to you.

I like my status. And I hope you make like $16 billion next year. I will try to keep my status with you as a most frequent guest also for this year. You better. I'm going to keep booking Saylor to try to get him to catch up so that you have meaningful competition. All right, man. Thank you so much. I'll speak to you soon.

Thank you, man. Thank you so much. I'll speak to you soon. Thank you, Scott.