Tech
Stablecoin giant Tether is backing an ‘unstoppable’ cryptocurrency chat app to take on Big Tech
“[At Tether] after all, we are bitcoiners. We believe in the mission of bitcoin that is bringing financial freedom to the world,” Ardoino said in a chat hosted on Keet on Wednesday. “If you have financial freedom, but you don’t have freedom of speech… we’re not truly free, right?”
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Tether was founded in Hong Kong 10 years ago and has since developed into a core component of Web3, often as the main source of liquidity for other cryptocurrencies thanks to its peg to the US dollar. According to government records, Tether still has an active corporate entity in Hong Kong, but Ardoino said it is “dormant” and that the company no longer has staff in the city.
With Tether now the world’s default blockchain-based dollar, Ardoino sees his new venture as a challenge against tech giants such as Meta Platforms, which owns Facebook and WhatsApp, and Google. As a peer-to-peer technology, Pear Runtime eliminates the need for expensive server infrastructure, allowing developers to focus on building apps, Ardoino said.
Its ability to do so depends on the backing of Tether, which Ardoino said made more than $6 billion in profits last year.
“We’re not interested in making more money,” he said. “We are investing in… companies that are aligned with the vision of bringing freedom and creating tools ready for the apocalypse.”
Keet, built in-house by Holepunch, is the first flagship tool using Pear Runtime. Like other peer-to-peer apps, users connect directly to other computers, so their Internet Protocol (IP) addresses are exposed to others in a chat room, although Keet doesn’t make that information directly visible in the app. However, Ardoino said messages are end-to-end encrypted and traffic cannot be publicly tracked, so only people a user chats with can see those addresses.
The company is unable to share developer statistics for the same reason, according to Holepunch CEO Mathias Buus Madsen. But there is “definitely a large percentage” from Asia, including India and “the Hong Kong area,” he said.
Keet connects users directly to each other for video conferencing and chat using the Pear Runtime protocol, eliminating the need for centralized servers. Photo: Holepunch
The app has already integrated some cryptocurrency features by including a Lightning wallet. The Lightning Network is a so-called Layer 2 payment protocol on the bitcoin blockchain that allows quick and cheap transfers of small amounts of bitcoin. The Holepunch team is also working quickly to integrate Tether, also known as USDT.
“Bitcoin is the unstoppable money and Keet is the unstoppable app. That’s why we thought it was more appropriate to have bitcoin first,” Ardoino said. “However, USDT will probably arrive soon, in the next few months.”
As the cryptocurrency sector recovers from the 2022 crash, the total market value of Tether’s USDT stablecoin surpassed $100 billion last month and now stands at around $106 billion, according to data from CoinGecko. According to market tracker DefiLlama, the total value of stablecoins in circulation amounts to $152 billion, giving Tether a market share of nearly 70%.
Its massive presence in the sector has also drawn increasing scrutiny and criticism in recent years for the lack of transparency on the reserves backing the USDT.
Tether Holdings, now based in the British Virgin Islands, has traditionally revealed little information about itself. It was started by the same people behind cryptocurrency exchange Bitfinex, where Ardoino serves as chief technology officer (CTO). Ardoino joined Bitfinex as a software developer in October 2014 and became Tether’s CTO in 2017, according to his LinkedIn profile.
Tether publishes quarterly statements of its reserves, and in October the company told Bloomberg it would begin publishing data on its reserves in real time. Ardoino did not share a timeline on this when asked, but said a full audit remains challenging because the collapse of FTX in 2022 has made major accounting firms more reluctant to partner with major cryptocurrency firms for fear of reputational risks.
“FTX hasn’t made our lives easier,” he said.
Another source of controversy has been the widespread use of USDT in cybercrime.
Ardoino criticized some of the reports that have been made about Tether in recent years, saying that the company works with the US Department of Justice, the Federal Bureau of Investigations and the Secret Service to track criminals using USDT.
“You have to be a really, really stupid criminal to use Tether,” Ardoino said, highlighting the transparency of its data because it is run on a public blockchain.
Members of criminal gangs who use forced labor in places like Myanmar they may not fear legal repercussions in countries they will never visit. This is just one reason why law enforcement is concerned about the growing use of encrypted services that hide traces of illegal activity.
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Meanwhile, financial regulators have raised concerns about the impact of stablecoins on financial stability due to issues such as capital flight. The Hong Kong Monetary Authority introduced regulations on stablecoins for public consultation in December which would require broadcasters to obtain a licence.
Tether is also “following the development of regulations” in Hong Kong, Ardoino said, adding that it is in discussions with local companies to explore ways to engage the Hong Kong market.
Asked whether he thinks an app like Keet could speed up illegal money flows or impact financial stability, Ardoino demurred.
“USDT helps the last mile. These are the people [whose] Their entire wealth is $100 and they don’t have a bank account,” he said. “The bankers don’t care about us.”
However, Ardoino clarified that there is an ideological component underlying the new P2P protocol. He cited a quote from the Joker in Christopher Nolan’s second Batman film, The Dark Knight, which “well reflects” Keet’s mission.
“It’s not about money; it’s about sending a message.