Tether USDT will be subjected to a full audit by a top accounting firm, according to the stablecoin issuer’s chief technology officer. Tether CTO Paolo Ardoino tells Euromoney that a top-12 accounting firm will audit the company because the top four auditing firms are wary of entering the relatively unregulated crypto space.
Tether has recently denied rumors that 85 percent of its commercial paper holdings are backed by Chinese or Asian commercial papers and are trading at a 30% discount. Commercial papers are unsecured short-term debt issued by businesses and financial institutions to meet liabilities, and they are typically sold at a discount.
The move comes as USDT has steadily lost market share following a series of redemptions over the last few weeks, caused in part by waning confidence following the Terra blockchain’s collapse last month.
Tether, the creators of the USDT stablecoin, is currently collaborating with MHA, a Cayman-based accounting firm. So far, the organization has only produced attestations, which are snapshots of a company’s balance sheet on a specific date.
In an interview with Euromoney, Tether’s chief technology officer Paolo Ardoino stated that the company was now working on a comprehensive audit, which, unlike attestations, would help provide a complete picture of the company’s financial position over a specific period.
“I think it’s in the top 12, so it’s not too bad.” “When the rules are unclear, the big four are a little more cautious about providing a full audit,” Ardoino said, noting that other rival stablecoins were still lacking in this regard.
Stablecoin issuer Tether Operations Limited (“Tether”) has announced plans to launch Tether tokens (“GBP₮”) pegged to the British Pound Sterling in early July. The pound-pegged coin is called GBP₮ (GBPT), and will initially live on the Ethereum (ETH) blockchain
Tether has been pressed to be more open about the reserves that underpin USDT, an asset pegged one-to-one to the US dollar. Disclosure, proponents argue, would help investors better understand potential risks and how auditors interact with the company.
Cloud Of Doubts On Tether USDT Reserves
While Tether has clarified its bankers, it has remained tight-lipped about its USDT reserves, citing confidentiality. Ardoino stated that crypto assets made up a small portion of Tether’s reserves.
He also stated that Tether has reduced its commercial paper holdings from $40 billion to $15 billion in the last eight months, assuaging market concerns about a risk in the firm’s portfolio. Ardoino stated that some of its reserves have been transferred into securities maturing in three months or less.
As a result of Terra’s demise, the question now is whether short sellers will have a better chance of success in the future when betting against Tether, which could have disastrous consequences for the cryptocurrency sector.
According to Paolo Ardoino, Tether (USDT) is mostly backed by fiat reserves, with only a small portion in digital assets. Tether has also reduced its commercial paper holdings. In fact, because the company has never redeemed its dividend, the accrued interest continues to add to its reserves.
Rising redemptions during the depeg caused the USDT market cap to fall below 70 billion. The USDT currently has a market value of $67.84 billion, according to CoinMarketCap.
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