PYMNTS MonitorEdge May 2024

Tether and Telegram Join Forces to Enable Crypto Payments

Stablecoin issuer Tether has partnered with the TON Foundation to enable customers to send cryptocurrency payments using encrypted messaging service Telegram.

This collaboration aims to create an app that serves as both a communication system and a bank account, providing users with a convenient and secure method of sending crypto payments, Tether CEO Paolo Ardoino told Bloomberg in a report posted Friday (April 19).

The TON Foundation, in conjunction with Telegram, is looking to bring more of Telegram’s 900 million users over to the TON blockchain and crypto wallet, Steve Yun, president of the TON Foundation, said in the report.

This move is driven by the demand for easy and efficient ways to send money, particularly in emerging markets where there is a significant desire to store wealth in U.S. dollars, according to the report. Tether’s USDT cryptocurrency is backed by reserves primarily invested in dollar-denominated assets.

While Tether is the most widely used stablecoin, it has faced scrutiny over its potential use in sanctions evasion and illicit activities, the report said. The United States and the United Kingdom are currently reviewing billions of dollars’ worth of cryptocurrency transactions involving Tether.

However, Tether emphasizes its collaboration with law enforcement agencies worldwide and follows sanctions rules to ensure compliance, per the report. The company has the ability to freeze assets when required and has frozen $1.1 billion in funds since its inception in 2014.

Critics have raised questions about the reserves backing Tether’s USDT, according to the report. Tether now issues quarterly attestations about the assets backing its reserves, with over $90 billion in U.S. Treasuries supporting its stablecoin. The company made $6 billion in profit last year, prioritizing redeemability by allocating $5 billion to its reserves.

In another recent development, Telegram said March 31 that it was pivoting to crypto payments for its advertisers and crypto payouts for content creators on the app.

The Open Network (better known as the TON Blockchain) and its native currency, Toncoin, is now the exclusive payment infrastructure for the social media advertising initiatives of Telegram.

Telegram is the four most popular messaging app by monthly active users after WhatsApp, WeChat and Facebook Messenger.