The largest stablecoin by market capitalization has now crossed half a billion users.
As all things finance goes, this is a significant achievement for a single entity. These are real people, finding value in a token whose value is pegged to the USD.
US dollar-pegged stablecoin Tether hit its 500 millionth user on Tuesday, offering a means to transact and save for those who have been excluded by the traditional banking system.
“Likely the biggest financial inclusion achievement in history,” Tether CEO Paolo Ardoino wrote in a post on X.
Tether said the figure represents 500 million “real people,” not simply USDT wallets, suggesting its stablecoin has now been used by around 6.25% of the world’s population. –Cointelegraph report
I want to start by talking about yield, something that has been widely debated over the past couple months.
Yields on stablecoins is something the banks fear with everything in them. Recently, Kraken co-CEO Dave Ripley, hit back at the bankers for calling stablecoin yields a ‘detriment,’ saying that consumers deserve the choice to earn yield on stablecoins, not be boxed into earning interest only through banks.
What DeFi needs to learn
Decentralized finance protocols have a lot to learn from the growth of Tether and its stablecoin USDT.
Simplicity rules when it comes to finance.
DeFi protocols were meant to revolutionize finance but they largely neglected building the simple solutions such as savings and payments that didn't involve dealing with any layer of complexity.
The larger population, which could greatly benefit from DeFi, could not because it mostly built products that the people who understand them would, for the most part, not want to engage unless it meant control of the ecosystem.
As we've seen with market makers and big individual LP providers.
Tether solved a real problem: access to the USD, on the global stage. Today, it has 500 million users and according to the World Bank Group report, about 1.4 billion people are unbanked or underbanked globally, and Tether’s USDT is potentially serving many of these neglected markets.
If DeFi will succeed, it has to start building for the simple market, which has the most user pool. If DeFi will achieve at least 4 billion active users, simple solutions such as savings and payments will need to be prioritized, otherwise, the industry risks being forever trapped and reliant on centralized services and companies.