Tether Chief Technology Officer (CTO), Paolo Ardoino expressed his view why a US default is unlikely.
Tether chief technology officer Paolo Ardoino said the probability of a default in the US is very low as it would have catastrophic consequences for the US economy.
“By the way, I think this with the potential U.S. default is unlikely — I mean, it would be catastrophic for the U.S. economy,” Paolo Ardoino said on The Scoop podcast.
“I think we’re all very closely watching what’s going on and what’s going to happen.”
Ardoino discussed what events could be the catalyst to shake things up in the market, as liquidity has dried up. He noted that while Bitcoin has bounced back from under $20.000 to over $30.000, it still has risks as interest rates are rising.
Paolo Ardoino also offers an optimistic path in the near term. “It’s kind of a factor,” added Paolo Ardoino, “but certainly if we start to see US inflation numbers come down, if the Fed stops raising rates, I believe we’re going to be in a situation where the market is in the market will start to recover, not just the crypto market.”
Paolo Ardoino also thinks that Tether will not be at risk. Although the majority of Tether’s reserves are made up of US treasuries, Paolo Ardoino said that Tether has begun using tools that provide the company with high liquidity and hold excess reserves.
Ardoino said the tools will protect the USD from being devalued in the event of any black swan events including default.