21/02/2026

BIZ & FINANCE SATURDAY | FEB 21, 2026

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US rejects global AI governance, says tech adviser NEW DELHI: White House technology adviser Michael Kratsios said yesterday that the US “totally” rejects global governance of artificial intel ligence (AI). Kratsios, head of the country’s delegation to a major AI summit in New Delhi, made the comments ahead of an expected leaders’ statement setting out a shared vision on how to handle the divisive technology. “As the Trump Administration has now said many times: We totally reject global governance of AI,“ he said at the summit, which drew to a close yesterday. “AI adoption cannot lead to a brighter future if it is subject to bureaucracies and centralised control.” Yesterday morning, UN chief Antonio Guterres had said that a new expert panel convened by the global body aimed to “make human control a technical reality”. The advisory group – aiming to be to AI what the UN’s Intergovernmental Panel on Climate Change is to global warming – was created in August, and its 40 members have now been confirmed, Guterres said. The AI Impact Summit is the fourth annual international gathering focused on the risks and opportunities presented by advanced computing power. At last year’s edition in Paris, US Vice-President JD Vance warned against “excessive regulation” that “could kill a transformative sector”. In New Delhi, Kratsios said that “international discussion of AI has evolved, as this summit itself attests,“ noting the change of the meeting’s name from “AI Safety” to “AI Impact”. “This is clearly a positive development,“ but “too many international forums, such as the UN’s Global Dialogue on AI Governance, maintain a general atmosphere of fear,“ he said. “We must replace that fear with hope,“ Kratsios added, saying that AI has the potential to “advance human flourishing and drive unprecedented prosperity”. He argued that “ideological, risk-focused obsessions, such as climate or equity, become excuses for bureaucratic management and centralisation”. “In the name of safety, they increase the danger that these tools will be used for tyrannical control.” “Focusing AI policy on safety and speculative risks... inhibits a competitive ecosystem, entrenches incumbents, and isolates developing countries from full participation in the AI economy,“ Kratsios said. – AFP

Stablecoin giant is crypto’s fragile foundation T ether has so far proved to be resil ient in its short life. Despite regula tory slapdowns, repeated crypto currency crashes, cybercrime and redeems the coins, thereby tethering USDT’s value to the greenback.

of strain. USDT is trading very close to a dollar on secondary markets. Redemptions don’t seem to be material. And Tether has other levers it can pull if holders lose confidence. It could hold on to interest payments and investment profits rather than paying them out as dividends, using them instead to boost its equity buffer. That appears to be what Ardoino and Devasini did in the final quarter of 2025. Perhaps more importantly, the wider Tether family could help out. As of December 2025, Tether claimed it had a greater than US$20 billion portfolio of investments in artificial intelligence, energy, media and other companies. Those are distinct from the assets backing USDT, meaning they could conceivably serve as a back-up reserve of sorts. Still, there’s a lack of transparency over how liquid those investments are. In any case, the possible consequences of a Tether meltdown are so severe that the scenario is worth thinking through. USDT is central to the crypto ecosystem, serving as a stand-in for dollars on many trading pairs. So if the stablecoin lost its peg, many widely referenced prices for tokens like bitcoin may cease to make sense. USDT is such a key pillar for crypto that it’s even possible to imagine major exchanges like Binance helping to rescue it in a crisis, effectively making it too big to fail. A selloff would have broader consequences, though. The first thing Tether would probably offload to meet mass redemptions are US Treasury bonds. The company said it had US$122 billion of Uncle Sam’s debt on Dec 31, more than Germany. The International Monetary Fund, Bank for International Settlements, and Treasury Borrowing Advisory Committee have all warned that runs on stablecoins could lead to firesales of Treasury bills, in turn potentially hurting short-term funding markets that serve as core financial sector plumbing. For all the efforts to tame the wild west of digital currencies, crypto’s edifice is built on a fragile foundation. Liam Proud is a Breakingviews associate editor based in London.

All this works as long as users believe the tokens are as good as a dollar. The company therefore makes sure that its reserve assets exceed the value of its token liabilities. This buffer, akin to a bank’s capital, bolsters confidence that Tether could meet any redemption requests in a panic. However, this equity cushion is shrinking. It declined from US$7.1 billion to around US$6.3 billion between the end of 2024 and the end of 2025, even as the volume of USDT outstanding surged. As a percentage of assets, equity was 3.3% on Dec 31 last year, down from 4.9% a year earlier and 5.6% at the end of 2023. In other words, if Tether’s assets lose more than 3.3% of their value, it would no longer have sufficient reserves to redeem all the tokens at their dollar peg. This slender cushion might be tolerable if Tether had parked all its reserve assets in short-term Treasury bills, which carry zero credit risk and can be sold quickly at face value. But such super-safe assets account for a dwindling proportion of the pile. Cash-like reserves – including repurchase agreements, bank deposits and US Treasury bills – were 76% of total assets in December 2025, compared with a recent historical range around 80% to 85%. The flipside is that riskier investments like bitcoin, gold and secured loans now make up 24% of the total, compared with around 15% to 20% previously. The overall picture, then, is of a bigger pile of liabilities supported by a slimmer equity buffer and matched with a riskier bundle of assets. One urgent question is what kind of market swings it would take to burn through Tether’s US$6.3 billion margin of safety. The 25% drop in the value of bitcoin this year suggests Tether’s stockpile of the crypto token is down by roughly US$2 billion. But that’s been offset by a rise in the gold price, which despite a recent wobble is still up almost 16% in 2026. The real danger for Tether is therefore if gold and bitcoin plunge simultaneously, or if the group suffers losses on its opaque US$17 billion book of secured loans. The company is showing no visible signs

the 2022 collapse of a rival, the company that issues the world’s largest stablecoin has survived and thrived. Its USDT token, which has grown to US$184 billion (RM719 billion), dominates the global market for dollar-pegged digital currencies. That durability is surprising. Despite occasional hints of progress, Tether CEO Paolo Ardoino and chair Giancarlo Devasini still do not publish full audits of the financial assets backing USDT. The group is based in El Salvador, which is hardly known for its tough approach to financial regulation. More pressingly, its most recent quarterly report shows key metrics of financial risk heading in the wrong direction, just as the value of bitcoin and other digital assets is sliding. Despite attempts by US regulators to bring dollar stablecoins back onshore, USDT remains more than twice as large as its nearest rival, Circle Internet’s USDC. If Tether’s solid streak ends, the consequences would be felt far beyond the world of cryptocurrencies. Tether International, which issues the USDT token, is probably one of the world’s most lucrative companies on a per employee basis. With about 300 members of staff, judging from LinkedIn, it paid out US$10.9 billion in dividends in 2025. Only 16 public companies in the world sent more cash to their shareholders last year, according to an LSEG database, and those are all giant global blue chips like Apple, Microsoft, and Exxon Mobil. Tether’s profits come from managing the assets that back USDT. Users give Tether a dollar in return for a digital token that’s useful for trading crypto or sending money across borders. Tether takes that dollar and invests it in so-called reserve assets, meaning US Treasury bills and other financial instruments. It keeps all the interest payments and investment profits on those reserve assets, while incurring relatively few operating costs. If USDT holders want to swap their tokens back into cash, Tether sells some investments and