Maelstrom CIO Arthur Hayes Alerts Big Banks Will Eventually Cannibalize Tether’s Business Model

Arthur Hayes, CIO of Maelstrom and erstwhile CEO of Bitmex, discussed the eventual demise of Tether and different stablecoin companies. Hayes explained that Tether’s concern model, which consists of taking dollars and investing successful treasuries, volition yet beryllium cannibalized by large banks similar JPMorgan erstwhile they get allowed to contented fiat-backed stablecoins.

Arthur Hayes Warns About Banks Replacing Tether and Other Stablecoin Companies

Arthur Hayes, the erstwhile CEO of Bitmex and CIO of Malestrom, a crypto-focused early-stage concern fund, has stated that helium expects large banks to instrumentality implicit the stablecoin business, present dominated by Tether, the institution down USDT.

At Laura Shin’s Unchained podcast, Hayes explained that portion Tether has configured itself to beryllium a large merchandise successful the crypto market, it has lone achieved its presumption owed to the refusal of the U.S. banking strategy to connection a akin product.

On Tether’s concern model, Hayes declared:

The radical who ain Tether marque thing similar $4 oregon $5 cardinal successful escaped currency travel each year. It’s fundamentally an involvement rate: they fundamentally instrumentality dollars, worldly it successful a slope account, and past they spell bargain treasury bills and they gain the spread.

Nonetheless, Hayes remarked that centralized stablecoins cannot relation arsenic they are present without utilizing banks to wide and custody their money. He stressed that slope managers were “f***ing morons” due to the fact that they supply these services to Tether and different stablecoin companies, yet they neglect to execute the aforesaid show offering stablecoins themselves.

Hayes said this concern volition extremity erstwhile the U.S. Treasury permits accepted banks to contented stablecoins, whose legitimacy and backing volition not beryllium questioned.

Hayes predicts that banks similar JPMorgan volition regenerate Tether and different stablecoins companies, making the aforesaid involvement play these bash today. “At the extremity of the day, they don’t person immoderate defensible concern due to the fact that they trust connected the banks to custody their funds and let them to commercialized dormant instruments,” helium concluded.

Tether closes 2023 with a marketplace headdress of $91.5 cardinal and $4 cardinal successful excess reserves, having invested successful respective enlargement initiatives, according to its CEO Paolo Ardoino.

What bash you deliberation astir Arthur Hayes’ sentiment connected the aboriginal of Tether and centralized stablecoins? Tell america successful the comments conception below.