The Future of Money: Bo Hines on USAT and Tether at KBW2025

Thank you everyone for joining us and thank you Bo and Brian for being here today. Uh Bo, you've been active in shaping conversations around digital assets and regulation as the CEO of USAT. How do you see the stable coin landscape evolving in the US and globally? Well, you know, I'll start with my my time in the White House um as the executive director of the crypto council. You know, David and I synced up on the transition team uh in November after President Trump had been reelected and we had mapped out a plan to deliver on the president's promises in the United States as he openly stated he wanted our country to be the crypto capital of the world and we had a lot of work to do.

Um, you know, the ways in which we move money in the US and globally, moreover, have been archaic for quite some time, and I liken it, you know, to the ways in which technologies evolved in how we communicate. Uh, it's changed rapidly over the course of the last two decades. The ways in which we move money really haven't. And so, that's why what we're doing at Tether is is so exciting. You know, digital dollars with open corridors, um, expeditious transaction settlements, um, more cost-effective transactions.

We wanted to see this injected um into the US financial system and that's why we spearheaded the Genius Act which truly does revolutionize our system in the United States uh in numerous ways. And so, you know, that was a massive accomplishment for the administration. I think it sets the standard globally uh for what we should be doing to address stable coins. Um and we'll continue to push forward. I know I have my fantastic former colleague Patrick Wit who's now spearheading the crypto council in the US and they're working on market structure legislation as well.

All of these things will help shape the next generation of finance. And I believe that Tether will be at the forefront of that. And with USAT, this will be the first licensed stable product offered in the United States. We hope this becomes the institutional product, but also the product for those that are underserved and underbanked in our country and globally as well. So, we hope to create seamless interoperability between USAT and USDT.

I think that we'll do that uh rather quickly and um I think it'll change the financial landscape for decades to come. And Brian, you've recently joined Stable as co-CEO from the venture arm at Block One. What drew you to this role and how do you see Stable's role in the stable coin and payments landscape?

Um, so joining Stable was a pretty big no-brainer for me. It was the right time. There was a lot of disruption that could be made and I think that Stable's technology stack is what's making it a leader in the payments rails. uh stable has really focused on how to make payments using UST, USUSDT as a currency that can be used globally. And I think without having a proper layer one that's dedicated to payments, we couldn't really get that scale.

I know talking with Paulo and everyone that the goal the next milestone in digital currencies and stable coins is to reach the $1 trillion mark. In order to do that, you to have that AUM, we need to have a system that's dedicated in order to build the uh the infrastructure that's needed. So I think joining stable was was a very easy decision for me because we had a great team. We had great connections and with that we're able to put forth that mission and deliver on it in a very timely way. Bo from your perspective what is the most important factor in building regulatory clarity for stable coins and what international impacts do you think genius has brought to the market?

Well the rules of the road have to be clear. I mean for for decades on end um founders in in this space in the digital asset space that is have been victims of really policym through prosecution and persecution um at least in the US and I know that that's also been the same globally in in in many jurisdictions and so what we wanted to do is create a clear regulatory framework that showed founders what they need to do in order to build and innovate and I think that same standard should be applied to other jurisdictions around the world and with genius you know we have a clear reciprocity standard for the US uh the treasury sits over the top of that and and defines what it means to be a dollarbacked stable in our case, which means you have to be one to one backed. Uh you have to be audited by a big five, you have to show your proof of reserves. Um all things that protect consumers and that's something that we care deeply about at Tether. And obviously we'll be the first genius compliant stable coin product offered in the United States.

Um with Anchorage being our issuer. Uh and I think that with this you'll see widespread institutional adoption very quickly. I think that banks will start to offer these products and the custodian services that come along with them. You know, when David and I first set out in the White House, we envisioned a world in which we'd move to tokenized public securities and 24/7 markets and all the things that many folks in this room have probably dreamed of for quite some time. You know, creating seamless on and off ramps between asset classes with Darback stables is immensely important um in terms of making sure that money flows and moves smoothly throughout the globe.

And I think we're on the precipice of accomplishing that. And so I know they're working on on legislation here. They're working on legislation elsewhere. I think that you'll start to see Europe mimic what we did in the United States very quickly. Um you know there's almost a firewall now to the US capital markets.

If you want to engage as we move towards tokenization, you'll have to use a dollarback stable and that's what positions Tether uh was such a unique advantage. Um but I think USAT will be a tremendous complement to that with the corridors that we have almost 500 million customers. Um, you know, we're hoping to be the institutional product that's offered in the US and I think that that will happen in short order.

Brian, how do you believe the Genius Act and emerging stable coin regulations will influence stable's role in shaping the future of the global payment system within the financial landscape?

Sure. I think the Genius Act was that watershed moment that blockchain has been looking for for the past decade. Um, in order to get institutions to use blockchain and use crypto and stable coins, we needed the regulatory compliance that could be followed. Um, as Bo is mentioning, globally, the Genius Act is kind of setting as the standard that other countries and other jurisdictions are going to follow in order to make it so you can use cryptocurrencies across borders, get that instant finality in transactions and reinvent the financial system that currently exists today. I think all of us here have had the issue with, you know, transferring money across borders, the problems that exist with that.

And we're not able to, we haven't had an advancement in the technology in so long. And I think this with the Genius Act, having the government pass it is really a way that we can start that change. And I believe that with um institutions, they want to have certain coverage. So, as Bo mentioned, with the compliance side of it, if you want to get the banks on board, you have to have the certain layouts of how they can use the currency and know what they're going to be reporting on. Brian, one more question for you.

Many chains aim to be general purpose, but Stable is laser focused on payments. How do you see Stable contributing to the future of global digital payments and what advantages does it bring specifically? So, at Stable, we really focus on that payment level of layer 1. And I think with all the previous changes that have been out there, there's a lot of congestion. And with that congestion, there's a lot of fees.

And with those fees, you also have to pay them in a different token. And when you have that dual token system with that volatality that exists with the gas token, it makes it really hard for financial institutions to adopt using cryptocurrency. They don't want to take on that risk. If the bank is looking to move $100 million 10 times a day, they don't want to have a gas token that they don't know where the direction is going to go. So at stable putting forth that payment system that or payment rails that allow institutions to use it with paying fees in USDT and trading USDT and derivatives of that we're able to actually have a faster system that doesn't have the congestion.

We know the fees are going to be low and with peer-to-peer transfers which I think is another big part of stable mission is that those are gas-free transactions. So users able to send money to each other in the same manner in the same speed without that congestion fees that are normally seen in the current layer 1 protocols. And I think you know the the move to the 1 trillion or having that killer app that's using cryptocurrency has been missing is a dedicated system for payments. And I think it's stable. The whole team is really excited for developing this because we've all tried using cryptocurrency and I know the user adoption has been great getting to the 260 billion mark.

But what we've been missing is how do you get people who aren't currently on crypto who aren't currently using stable coins and I believe having a system whether it's our our protocol or the apps that are built on our system enables those users who had been kind of weary of it were not knowing how to use a you know a key identifier put their private keys. We've really abstracted that all away and we built a system that allows every user to use crypto in a very traditional sense.

Bo, from a policy lens, how important is it that stable coin projects are working directly on the last mile of adoption, which is getting stable coins into everyday payments? Well, look, I think that the technology that's emerging from this space is starting to become injected into the traditional financial institutions very quickly and folks are starting to realize that this is the next generation of finance. This is the next generation of how we move money. Um there's no longer a scorn towards blockchain technology uh and public ledgers. Uh you know, we're seeing banks get more comfortable with understanding, you know, how compliance works in this new age.

And you know, as we set out to create a regulatory standard in the US, we were super conscious of the fact that it needed to be clear and concise. Um, and that's something that we had been echoed by founders uh for quite some time. And our goal was to bring as many folks back onshore into the US where we have the deepest capital markets in the world. Um, so that they could actually build and innovate there. And I think that's what we've done with Genius with the stable coin legislation.

And you know, I mentioned the reciprocity standards being adopted globally. I think that will happen very quickly and you'll start to see these products be offered by financial institutions that are moving large amounts of money globally whether it be in the commodities trade uh whether it be through the purchase of tokenized public securities and getting rid of these intermediaries that cost businesses and consumers so much money every year is drastically important. Um it changes the way in which we move money globally for for years to come and that's something that we should all be extremely excited about. And I think that, you know, obviously Tether being the the Goliath in the space, um, we're really excited about what what Stable is building. Uh, we think that they're a fantastic product and we're we're extremely excited to support them in their efforts in their launch.

You know, Tether has been agnostic with L1's, but a product like this that's new and unique is just immensely exciting for everyone here. Um, we're looking forward to supporting in whatever way that we can. And uh you'll see as we roll out USAT hopefully with um some big announcements to come in the next couple of quarters uh stable will play an integral role in and how we move our product.

We're excited about it. I know that with USAT with the roll out you guys pick some you know the top partners out there. We're excited to be able to provide a product out there to the globe enabled to using things like Anchorage in the background. uh USAT is really going to set itself apart because currently with as you mentioned with institutions having a platform that doesn't have that that deep stack of not just the technology but also the institutional players we're not going to be able to get the banks we're not going to be able to get the safety and security of moving money without those players. So we're really excited to work with you and Paulo and everyone else at at Tether and USA.

So we're excited to see what happens.

I think it's fantastic.

So it's been a huge year for stable coins and crypto in general. What do you think will be the enduring changes when we look back at this year for stable coins?

Go ahead, Brian.

I think the biggest part is obviously the AUM is going to change, but also I think the small transactions right now. You know, stable coins are being used heavily in in South America and in Africa for remittance. And I think that's been the growing undercurrent that has led stable coins to become how large it is today. But I think the larger shift we're going to see as Bo was talking about the merchants that are currently paying three and a half and 4% to do a simple transaction when buying a coffee can now move away from that system using a system that is either low fee or no fee. And I believe that that will continue on where you're going to move money from one person to the other.

You shouldn't have all these intermediaries involved. Rather, we want to go true peer-to-peer where there's no middleman. No one else is taking that cut. So I think we're looking back from a year from now looking back at this we'll wonder how we ever had such a complicated system and how much easier it is then.

Yeah. I mean I think the global financial system will be much more fluid. Um and that benefits everybody regardless of which country you live in or under what regulatory regime you know you persist. And so as we look at this new world and this evolving financial system I think that you're going to see technology continue to progress. Um, I think you're going to see the ways in which people money people move money continue to change.

Um, obviously stable plays an integral role in that and and you know others as well. But at Tether we're uniquely focused on providing services to those that are uh either underbanked, debanked, uh don't have access to traditional means of of moving money. And in the US that's no different. So, you know, our product while it will be widely adopted by US financial institutions, and we hope it becomes the main method of moving large amounts of money overseas, whether it be through trade or other means, um we're still focused on our mission, which is to help those that uh have been forgotten and lost um in this system for quite some time. You know, I I I think that just looking back on what's happened over the course of the last decade is really important.

And as I mentioned earlier, you know, many folks in this room, many founders in this space were were truly victimized. Uh it forced a lot of people offshore in the US sense. Obviously, there's a lot of activity in Dubai and other places. Um you're starting to see that change. You're starting to see people come back to the US.

Uh you're starting to you're starting to see people be comfortable building there, which um is immensely rewarding to see the product of our labor and our work with Genius. And so I would encourage other countries to follow the reciprocity standard outlined in section 3 of Genius. I would encourage them uh to look carefully at the language that we use because every word was chosen extremely carefully. Um language matters when it comes to digital asset regulation and policym every word is important. Um you know the president said something that was quite remarkable when we held the first White House crypto summit to many of the founders that were there in the space.

He said, you know, you had a better chance of being in jail last year than you did being in the White House talking to the president of the United States about what you want to do with your businesses here on US soil. Um, and it's true. I think he actually said that to uh the Winklvos twins directly and you know, they echoed that sentiment. So, we're starting to see um what a sea change looks like. The tide is turning and we just want to continue to foster that.

Tether playing such a um critical role in the ecosystem. We want to make sure that we're driving other projects forward that we're helping to invest. Obviously, Tether has numerous investments and is building out fantastic technology in many different verticals. Um, I encourage any of you out there in the crowd to reach out to us if you have an interesting idea, if you're building something that could be useful in this space because, you know, we're here to help. We're here to be active participants.

Um, and we want to make sure that we're pouring back into this ecosystem that's done so much to revolutionize how money's moved over the course of the last few years. And just one more point on that is with Tether you know when you touched on the people who are unbanked that's it's it's surprising because you know 1.5 billion people currently don't have access to banking whether it's their jurisdiction or their level of wealth but they still have the need for money and I think that's the piece that's been missing or been overlooked is that you still have to do transactions if you can't have the bank account there were predatory systems whether it was in Africa where they had mobile banking that really took away from like the the fees that were so high and I think tether is is in instrumental in how they rebuilt that. So now with a mobile phone, you can get that instant access to capital whether you're transacting or buying or receiving. And I think that's where we're really going to see those those that were unbanked is really a way to go upwards in the economy to like look at the US where you're mentioning before it was not as crypto friendly as it is now under this administration and we're able to get things be the leader.

So I think the genius act is a really good way of putting America first and that global currency and being able to use that as a direction that everyone can start using as with reciprocity using that currency globally and actually have transactions that move at the speed that we are expecting.

Well, you know, it's funny you mentioned the number of of people that are debanked or underbanked or underserved. You know, for a long time they tried to say that Tether was servicing a niche. That's one-third of the global population. I mean, it's quite remarkable when you think about it that way. It's uh quite a large niche and so now we see these products become institutionalized.

It it certainly changes the game. Um but you know one thing I'll mention is over the course of my time in the White House it was fascinating to see how the traditional financial institutions started to adapt and evolve. You know at the beginning they were still quite skeptical of the technology emerging in the space. They didn't understand it and things that you don't understand are often times scary. Um, as clear rules were laid down, we started to see a rush of folks knocking on our door asking who can they work with, you know, who are the right partners, who's building the best technology, and it shows that they're keen for adoption.

And I think that, you know, our Treasury Secretary, Scott Besson, said that he expects the stable coin market to be over 1 trillion in the next few years. Um, I I certainly believe that's the case. I think could actually be exponentially higher as more public securities start to become tokenized. The on andoff ramp is going to be a dollar back stable. um and it acts as a firewall to the capital markets and in a tremendous way but I also think it helps with global trade.

Um it helps with the commodities exchange in the US. Um you know for a long time we've struggled in that space at least at home because the settlement times were just so long it didn't make sense and so that's that's changing extremely rapidly and um you know the sky's is the limit in terms of where this can go. you know, at Tether, we love Bitcoin, we love gold, uh, and we love the US dollar, and and we'll continue to to promulgate and propagate all three.

And, um, one more point to that when you mentioned with the unbanked and how that's been a fiction that has been solved, and you know, it used to be considered the niche. And I think that's an interesting point with dovetailing what you said about the banks or traditional financial institutions was that it had always been looked at that they didn't need to make the change. when Bitcoin started coming to the market, they knew the technology was good, but with any disruption out there, there's always that that risk or that fear where they're fearing of what it's going to do to their current business model or what fees they're going to lose. And I think now they've learned to embrace. So the next step of that like that integration or that on-ramping of crypto is as you're saying now every financial institution is trying to either launch their own coin try to see how they can integrate because they know that it makes their work easier and safer and better because we look at how Tether for example has now done more transaction volume than Visa and Mastercard yet the fees are so high and I think that's been a problem is that they didn't they didn't have a disruptor.

You didn't have to improve your pricing. You didn't have to change your business model because there was no one coming to compete with you. And I think now those institutions are actually seeing it as how do we embrace this to make ourselves better. So it went from being a competition to being a tool that they want to use and deploy at their base level.

I agree with you. I mean rising tides raise all boats and um I think that's what we're seeing occur here. Again I just want to thank the stable team. I want to thank you know Korean blockchain week, all the folks that are here, all the founders that are here. All of you that have persisted in the midst of chaos and uncertainty for over a decade.

I think that clarity is finally here and that's uh a very positive thing for the space and we hope to continue to push that forward and Richard I want to thank you Canner being a tremendous partner of Tether as well. Um I think it's going to be a fantastic uh next 48 hours and we look forward to everything that's going to be built.

Thank you both for coming. Uh so in the 30 seconds left I guess Brian to wrap up what are the key milestones that we should look for in 2025 for stable?

Sure. Um so stable's really excited. You know, we worked really hard this past year, put a lot of of effort into building our product. And I think what we're most excited for is the launch of our system, our our mainet, and with that, you know, shortly thereafter, we have our mobile app that's going to be launched. And I know the weight list launched yesterday.

It was getting really good traction. I think that really speaks volumes to the warm reception we had here at Korea Blockchain Week and getting to work with you guys is that people are excited to have something that really is going to make that paradigm change that been missing in the ecosystem for so long. And so, you know, I'd see by the end of 2025, we're most excited for having everything launched that we've been building.

Thank you everyone for listening and thank you Bone Brian.

Thanks, Richard. Thanks, Brian.