Cryptocurrencies and football – Tether in Juventus’s share capital
At first, hardly anybody knew him. Then people started to know him, but wouldn’t take his calls. Then he bought himself a helicopter. Then they found him sitting next to them in the VIP stand at AC Milan games, and they stopped ignoring him. The year was 1986, and the rest, like it or not, is Italian history.
What does this have to do with Web3? Quite a lot, because news broke a few days ago that Tether has bought into the share capital of Juventus FC (with 5%) and is willing to increase its stake .
Well, this calls for a Don Abbondio moment (the priest in Manzoni’s The Betrothed who famously asked “Carneades! Who was he?”): Tether, who was he? Like Carneades, nobody, or rather very few, knew until now what Tether is and what it does.
That’s easily explained: Tether is a brilliant idea. It works like this: you give me a sum, say 100 dollars, I give you nothing in return, and I invest the money in US Treasury T-bonds (the safest investment in the world, at least until last January 20). When you ask for your 100 dollars back, I give them to you, but I keep the interest on the T-Bonds. This mechanism allowed Tether to make billions in profits, in real dollars, last year (and presumably this year too).
Obviously, we’ve simplified: it’s not that I give you nothing at all, I give you a cryptocurrency (called USDT) pegged to the dollar, which therefore fluctuates very little. It’s a so-called stablecoin, that is, a stable cryptocurrency, precisely because it fluctuates very little around parity with one dollar (or euro, or another currency).
What is USDT for? It lets crypto traders park value in a stable currency without having to pass under the yoke of the banking system, that is, without converting Bitcoin into “normal” dollars/euros. So they stay within the crypto world. Or, to put it another way, USDT are crypto-dollars (there are crypto-euro equivalents too). Of course, besides parking value, they can also be used for other things, including transferring money quickly and with low fees. That’s why stablecoins are viewed with suspicion by many central banks. The same ones that have been studying digital currency technology for years without coming up with anything concrete. Broadly speaking, the Americans are in favor because stablecoins bring the dollar back to center stage and, ultimately, place T-Bonds around the world. The Europeans, as always, are not, because stablecoins risk getting around the controls on capital movements. And of course, what have we done? We’ve slapped a nice piece of EU regulation on it, MiCA (and then we’re surprised when they get angry with us, but that’s another story). MiCA, to which we devoted a post at the time, imposes a whole series of strict constraints on the players (Issuers, Exchanges, etc.) that deal in stablecoins.
So, even if it’s a special kind of cryptocurrency, a stablecoin in fact, Tether’s move still brings the crypto sector to the attention of a popular audience that is by nature more at ease with the pink pages of La Gazzetta dello Sport (Italy’s best-selling sports daily) than with the faded pale yellow of Il Sole 24 Ore and the Financial Times. And one thing can lead to another, especially if it comes from someone with a long-term vision who doesn’t stop at what seems obvious to others. That’s what the Cavaliere (Silvio Berlusconi) did in his day. Just for the record, Tether’s CEO is an Italian, Paolo Ardoino.
Of course, the real quantum leap would be to go from a simple shareholding to a shirt sponsorship on Juventus’s jerseys themselves, with Tether/USDT in full view in place of the traditional (for 11 years) Jeep logo.
Because, as happened almost forty years ago, football is a sounding board that provides visibility and exposure that are hard to achieve by other means. Of course, one can’t help thinking, at least for a moment, of the “parco buoi” (the herd of small investors) we were talking about last week.
