Tether’s general counsel has publicly appeared to announce that a full audit is coming up after Paxos tried to blemish its blockchain infrastructure platform. Paxos had claimed that USDT is “not a real stablecoin” which Tether now refutes strongly.
The project’s general counsel has revealed that the world’s most popular stablecoin ‘Tether’ will conduct an official audit in just months. The counsel strongly believes that the process will restore the fidelity in its platform.
An official audit for the world’s third-largest digital asset has been in the waiting for several years, with an increased regulatory pressure from the authorities reportedly believed to have accelerated the process.
In a July 21 online interview on CNBC, Paolo Ardoino, Tether CTO, and the general counsel, Stu Hoegner, were subjected to tough questions over USDT’s backing and transparency concerns.
But, the general counsel readily responded to the question stating:
“We are working towards getting financial audits, which no one else in the stablecoin sector has done yet.”
Hoegner confirmed that the company plans to conduct an official audit in just “months, not years.”
While responding to the issue of backing, Hoegner insisted that Tether is backed one-to-one with its reserves but admitted that those reserves were not all in US dollars. He revealed that the company’s held reserves are heavily dollar-weighted but include cash equivalents, bonds, secured loans, cryptocurrency assets, and other investments.
According to a transparency market report, the current market capitalization of USDT has surpassed 62 billion. The stablecoin has soared 195% since the beginning of the year. Nonetheless, it has lagged behind rivals USDC and BUSD in terms of growth rate.
Circle, a stablecoin jointly attacked with Tether, released its reserves disclosure report on July 21. The firm revealed that 61% of USDC’s reserves were held in cash and cash equivalents, with the rest in commercial paper accounts, treasury, and bonds.
Paxos Strikes Tether and Circle
Paxos, a rival stablecoin, took a swipe at both Tether and Circle while releasing its reserves disclosure report on July 21. Paxos claimed that the two were “not comprehensively overseen by any financial regulators.”
“Neither USDC nor Tether is a regulated digital asset; for the simple reason that neither token has a regulator. In fact, neither USDC nor Tether tokens are ‘stablecoins’ in anything other than a name.”
Nonetheless, Paxos revealed that 96% of its stablecoin reserves are either held in cash or cash equivalents.
Tether started to reveal the breakdown of its USDT backing in May after receiving intense scrutiny from US lawmakers. Since then, the firm has been submitting periodic reports regarding its reserve in agreement with its earlier settlement from the New York Attorney General’s Office in February.