According to the project’s General Counsel, there will be an official review of the world’s most popular stablecoin, Tether, within months.
An audit for the world’s third largest digital asset has been expected for several years, and increasing regulatory pressures appear to have accelerated the process.
In a rare mainstream media interview on CNBC, Tether CTO Paolo Ardoino and General Counsel Stu Hoegner were asked some urgent questions about the support and transparency of the USDT.
Hoegner answered the question with the words:
“We’re working on doing financial reviews that nobody in the stablecoin sector has done before.”
Hoegner added that the company hopes to do this first and that audits will be in “months, not years”. He stated that Tether was one-to-one hedged with its reserves, but admitted that those reserves are not all US dollars. According to Hoegner, Tether’s reserves are heavily weighted in dollars, but also include cash equivalents, bonds, secured loans, crypto assets, and other investments.
The current market capitalization of USDT is 62 billion, according to Tether’s transparency report. It has grown 195% since the start of the year but is lagging behind rivals USDC and BUSD in terms of growth.
Connected: Coin Metrics Co-Founder Targets Tether FUD. by WSJ
Circle released its own reserve disclosure report on July 21st, which found that 61% of USDC’s reserves were held in cash and the remainder in commercial paper accounts, government bonds, and bonds.
Paxos takes a prank
In a related development, rival stablecoin company Paxos searched both Tether and Circle on a July 21 blog post, claiming that they are “not being fully monitored by any financial regulator.”
“Neither USDC nor Tether is a regulated digital asset for the simple reason that none of the tokens have a regulator. In fact, neither USDC nor Tether tokens are “stablecoins” in anything other than name. “
Paxos announced that 96% of its own stablecoin reserves are cash or cash equivalents.
Tether first announced a collapse in its USDT support in May after US lawmakers stepped up scrutiny. The company has provided regular reports on its reserves since reaching an agreement with the New York Attorney General in February.