Accounting is not a very physical job, but tell that to the KPMG gnomes who just spent weeks lugging around gold bars in a secret Swiss cavern. This came after stablecoin giant Tether tapped the Big Four firm to carry out an audit of its reserves, which includes around 150 tons of bullion that back the company’s popular gold token. “It was a heavy-lifting exercise,” CEO Paolo Ardoino tells me of the audit, which not only confirmed that, yes, the gold is all there, but that Tether’s overall reserves exceed its liabilities by $6.8 billion.
The KPMG audit should finally put to rest one of crypto’s longest-running conspiracies: That Tether’s $183 billion supply of USDT stablecoins is not properly backed, and that the company would one day pull the mother of all rug pulls. So much for that. While hyper-secretive Tether is unlikely to win a prize for corporate transparency any time soon, the KPMG seal of approval means the media can turn to more interesting questions—like what the company plans to do next. For starters, it’s notable that, like many others in the blockchain world, Tether is trying to shake the “crypto” label.
“It’s been a while since we’ve considered ourselves crypto. I think that we are both a digital dollar company and a digital gold company,” says Ardoino, adding that Tether now has over 650 million worldwide users. The bulk of these are in regions like Africa and South America, where governments have repeatedly debased national currencies, and prompted their citizens to seek out sturdier assets like Tether’s dollar and gold offerings instead.
Now, Tether is accelerating plans to expand far beyond financial services, and transform itself into a platform capable of delivering technology and infrastructure. In the last two years, it has invested heavily in fields like decentralized communication, farming, and a network of solar-powered kiosks that provide off-grid electricity for a few dollars a month. Next up is basic AI services.
Ardoino points out that, even in the poorest countries, nearly everyone has a cell phone on which it’s possible to run a simple AI model. The upshot, he says, is that it’s possible to build a series of AI applications aimed at the developing world, where many of Tether’s existing customers reside. Tether’s applications are not going to deliver cutting-edge frontier models, of course. Instead, Ardoino says the point is to provide basic AI tools across a series of verticals—health, finance, sports, and so on—that will let anyone use the technology in their everyday life.
Ardoino didn’t explain the business model for this endeavor, but presumably, it would entail customers spending a few bucks a month using Tether’s stablecoin, or another form of digital payment, in order to access AI. If this comes to pass, it would be a fitting evolution of blockchain’s original promise: To build decentralized global technology networks where anyone can participate. At a time when the world’s political systems are under massive stress (you can read Ardoino’s take here on where it’s all going), these networks will likely grow in importance.
“My fear is this, right? We have already a huge wage gap that […] is creating an instability in society ….This cannot become a wealth gap multiplied by an intelligence gap,” Ardoino warns. Definitely something to think about.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
DECENTRALIZED NEWS
President Trump’s World Liberty Financial won approval for a national trust charter from the OCC, while his crypto-heavy media firm posted Q2 losses of $238M, mostly from a fall in Bitcoin prices (Reuters, Fortune)
Alt-coins are taking a beating in the current downturn, and leading the likes of Grayscale and Bitwise to close or cancel ETFs built around the products (Bloomberg)
The Clarity Act has sputtered, but the White House is convening a meeting on Wednesday of execs from Coinbase, Ripple, a16z, Kalshi, and others along with the CFTC Chair (Semafor)
River Markets raised an $8.5 million seed round led by Haun Ventures to further expand a service that lets institutional traders operate across multiple prediction markets (Fortune)
MEME O' THE MOMENT
Memecoins are having a resurgence on newer platforms like Robinhood Chain, but the economic case for buying them is as nonsensical as ever:
