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In the latest episode of the Crypto Pod, FiveWest CEO Omer Iqbal takes us through the astonishing rise of US dollar-pegged stablecoin Tether – now the most profitable crypto company in the world and one of the most profitable companies in the world.
Competitors – including banks – are eyeing Tether’s $13 billion profit in 2024 with envy, and many are planning to launch their own stablecoins.
What explains the extraordinary rise of stablecoins? Millions of Africans are using them to escape weak local currencies, while companies are converting local currency reserves into stablecoins to protect against inflation and currency depreciation.
Read/listen:
How to dollarise your life with stablecoins
Why Africans are falling in love with US dollar stablecoins
In other words, stablecoins offer a way for Africans to dollarise their earnings and savings.
Iqbal explains that Tether operates much like a privately owned central bank, with reserves equivalent to more than $140 billion.
That gives it enormous power in the global financial system, and its target of 100% collateral means it is safer than virtually all banks. Each time a stablecoin is purchased, it is automatically backed by an equivalent in USD cash or US Treasuries.
How sustainable is this model? There have been questions – and court cases – about Tether’s reserve backing, and one way to silence the naysayers is to provide real-time audits.
Iqbal also details FiveWest’s plans to emulate Revolut – the international cross-border payments giant – effectively marking out its territory as a digital bank.
Tune in to the full episode to hear more about Tether’s role in the crypto world.
For previous Moneyweb Crypto Pod episodes, click here.
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