Q: After Tether, you came back to stablecoins with STBL, which you’re calling “Stablecoin 2.0.” What problem with today’s stablecoins are you trying to solve?

A: Stablecoin 1.0 was simple: give me a dollar, I give you a token, I keep the interest. That made sense in 2014. Back then, we could put the dollar on the blockchain, but the collateral backing still sat in the traditional financial system. Today, that’s changing. Treasuries and other financial assets are being tokenized, which creates an entirely different opportunity.

The obvious question is: why give an issuer your dollar and let them keep all the interest when you could use that same dollar to earn the yield yourself while still having a stablecoin you can spend? That’s what STBL is designed to do.

The fundamental innovation is separating the money from the yield. You deposit a tokenized Treasury into the system and receive two things: a stablecoin you can use, and a separate token representing the income generated by the underlying asset.

In the old model, the issuer captured the economics. In this model, the person supplying the collateral keeps them.

There’s also an important regulatory distinction. The yield is tied to the underlying asset and the party providing the collateral, not simply paid to someone for holding a stablecoin.

And because the collateral is tokenized, you can verify what’s backing the system onchain. You’re moving from a model where you largely trust an issuer’s reporting to one where the reserves can be far more transparent. That’s what I mean by Stablecoin 2.0.

Q: You’re pitching this to exchanges and other large holders that could issue their own stablecoins. How does that work, and how do all these different coins stay fungible?

A: Anyone sitting on a large stablecoin balance is sitting on someone else’s yield. Think about an exchange holding billions of dollars in stablecoins. Why should another company capture the economics on all that money? The exchange has the customers, the distribution, and the platform. It should be able to issue its own currency and keep the yield itself. That’s the opportunity.

With STBL, an institution can bring its own approved collateral into the system, whether that’s tokenized Treasuries from a major asset manager or other eligible financial assets. It can then mint stablecoins against that collateral and retain the associated yield rights.

Different institutions will have different requirements. A regulated U.S. issuer needs to operate within the applicable reserve rules. Other jurisdictions and structures may permit a broader range of collateral.

The interesting part is that these different coins can all connect to shared infrastructure.

We do that through a defined set of approved assets and collateral-specific haircuts. A highly liquid Treasury asset might support more stablecoin issuance per dollar of collateral than a less liquid credit asset. Those haircuts help protect the system and support redemptions at par.

So you can have different institutions issuing their own currencies, with different collateral strategies, while using common liquidity and redemption infrastructure.

The goal is simple: thousands of networks can have their own stablecoins, but to the end user, a dollar is a dollar.

Q: Your other focus is onchain banking through WeFi. Why now, and how does anyone compete in financial services today?

A: Because the rails are finally built. For years, I’ve had this vision that anyone in the world with a connected device should have access to world-class financial services. It shouldn’t matter where you’re born, what bank will take you, or whether your local financial system works.

Stablecoins have already demonstrated that demand. Some of the strongest adoption has come from people in countries where traditional banking is expensive, restrictive, or simply doesn’t serve them well.

The challenge was always infrastructure. We didn’t have all the pieces necessary to deliver a complete financial experience outside the traditional banking system. Now we do.

A neobank is a new interface on top of the old banking system. Onchain banking changes the architecture. You hold your own assets and the services are built around you, instead of a bank holding your money and granting you access to it. The next question is how these services compete.

Speed and cost are becoming commodities. Within a few years, moving money instantly and for almost nothing will be standard. Nobody is going to build a lasting competitive advantage simply because their transfers are faster or cheaper.

The competition moves to the experience, the rewards, the loyalty, and the strength of the network. Banks aren’t going to disappear. But the branch is no longer the center of financial services. The wallet becomes the foundation, and the super app becomes the interface through which people access their financial lives. 

 Q: Let’s go back to the beginning. How did Realcoin, which became Tether, come about?

A: I’d been good friends with Brock Pierce for years. Brock is a force of nature, especially back then. I’d spent my career in digital media and advertising. I’d sold a company and was taking some time off, and I kept telling Brock, “Let’s do something.”

In mid-2013, he told me, “You’ve got to buy Bitcoin.” Back then, buying Bitcoin was incredibly difficult. I couldn’t just open an app and buy it. One of Brock’s friends actually had to buy it and hold it for me.

Then, late in 2013, we were sitting at a bar called Bungalow in Santa Monica, and Brock said, “We’re going to put the dollar on the blockchain.” I said, “Great, I’m in.” What made it so obvious to me was my experience with the early internet.

In 1997, right out of college, I joined Avenue A, one of the first online advertising agencies. There were seven of us when I started. Within two years, we’d grown to about 500 people and gone public.

I’d seen what happens when a new technology completely transforms an industry. And when I got involved with Bitcoin, I recognized that same kind of opportunity. But there was one obvious problem.

Everyone in our little crypto world was fascinated by Bitcoin. The rest of the world wasn’t. To most people, it was this strange new currency they didn’t understand and didn’t particularly want. But everybody understood dollars.

So putting the dollar on the blockchain made perfect sense. You could take all the benefits of this new technology, moving money globally, instantly, at almost no cost, without asking people to adopt an entirely new currency.

I started the company and became CEO, Brock opened the doors, and we brought in Craig Sellars from Mastercoin to build the software and wallets on top of the Mastercoin protocol.

We were taking one of the world’s most familiar financial assets and making it usable on an entirely new set of rails. I know it sounds easy, and looking back, the idea was very straightforward. But making it work in the real world was anything but.

Q: You sold Tether in 2015. Today, it’s one of the world’s largest holders of U.S. Treasuries, and reports have suggested valuations as high as $500 billion in fundraising discussions. It’s also one of the most profitable companies relative to its headcount. Any regrets?

A: Knowing what I know today? Of course I would have held on. But nobody gets to make decisions with hindsight. People look at Tether today and see this extraordinarily profitable company. That’s not what we were looking at in 2015.

The crypto market had collapsed. The company was running out of money. Nobody wanted to invest. Banking was incredibly difficult, and the regulatory environment was a minefield.

There were investigations throughout the industry; people were facing serious legal consequences, and as founder and CEO, I was carrying the responsibility for the company. And there was no obvious sign that things were about to turn around.

The market didn’t really come back until the ICO boom in 2017. Even after that, Tether spent years dealing with controversy and skepticism. It certainly wasn’t obvious in 2015 that it would become the business it is today.

You make decisions based on the information and circumstances you have at the time. But I’m incredibly proud of what we created. My contribution was having the vision and the nerve to actually build it. We recognized that there was a very simple, very powerful idea: what if you could move dollars around the world as easily as you send an email?

You give me a dollar, I give you a digital dollar, and you can redeem it. That was the business model. It was elegant in its simplicity. And it ended up becoming one of the foundational pieces of the entire digital asset industry. That’s something I’ll always be proud of.

Q: Having built the first one, what does Tether’s story tell you about where stablecoins are going?

A: We’re going to see thousands of stablecoins. Every major financial institution, payment network, and large platform with meaningful distribution has a reason to issue its own currency. And the reason is pretty straightforward.

If money moves through your network as somebody else’s stablecoin, somebody else generally captures the yield on the reserves. But if it’s your own currency, you have the opportunity to capture those economics while the money circulates within your network.

You also create a much stronger connection to your customers and a better understanding of how money moves through your ecosystem. So the economic incentive is enormous. Now, people hear thousands of stablecoins and think that sounds incredibly complicated. But the end user is not going to care.

Clearing systems, liquidity networks, and arbitrage will increasingly connect all these different currencies. They’ll become interoperable behind the scenes. And that’s where the next big change comes in. AI agents are going to change how we use money.

Today, you open an app, choose a currency, select a network, check the fees, and make a payment. In the future, your AI agent will handle all of that. It will know which currency is fastest, cheapest, safest, or gives you the best rewards. It’ll know which payment route makes sense, which financial service offers the best terms, and even which credit card or payment method gives you the best shot at getting those Taylor Swift tickets. You won’t need to think about any of it.

Within a few years, the distinction between your wallet and your bank account will start to disappear. You’ll have one financial interface that manages everything. You won’t care whether you’re holding USDC, USDT, dollars, euros, or some stablecoin you’ve never heard of. You’ll just say, “I’ve got to pay that guy,” and your agent will figure out the rest.

The future isn’t about people choosing between thousands of stablecoins. It’s about thousands of stablecoins operating behind the scenes, and people never having to think about them.