The Tether general counsel has declared an official audit in few months. USDT is a popular stablecoin occupying the third position in global digital assets. As it’s on blockchain that cybersecurity experts deem unhackable, the majority today trusts its security.
However, many people in the crypto community have been waiting for a financial audit of the stablecoin. Now, it seems that the ongoing regulatory issues in the crypto industry have galvanized the Tether team into action. As a result, they’re declaring that an audit will take place soon.
Tether Executives Grants Media Interview
Another rare incident is an interview in which the Tether CTO Paolo Arduino and Stu Hoegner, the general counsel, participated on CNBC.
During the interview, the hosts asked the duo some questions about USDT’s transparency and backing. In response, the general counsel stated that the team is working to be the first in their sector to get financial audits.
He also mentioned that the audits would come in months and not years. As for backing, he stated that the stablecoin is backed with reserves.
But Hoegner mentioned that some of the reserves are not US dollars. But the reserves are more US dollars plus other cash equivalents, secured loans, crypto assets, bonds, and others.
However, in the Transparency report which Tether published, the market cap for USDT stands at $62 billion. Even though the number has increased by 195% since 2021 started, it is still behind competitors such as BUSD and USDC.
When Circle released a reserve report yesterday, July 21, it showed that 61% of the USDC reserves are cash & cash equivalent. The remaining 39% are in treasuries, bonds, and commercial paper accounts.
Taxes Decides To Attack
Paxos is a rival to Tether and recently attacked the stablecoin and Circle through its blog post on July 21, 2021. In the post, Paxos claims that the duo is not operating under financial regulators. In his words, both USDC and Tether are simply Stablecoins in name only.
Paxos disclosed that its stablecoin reserves are a combination of cash or cash equivalents to support its claims.
But in May, Tether disclosed the total backing that USDT has, which were cash 3.87%, fiduciary deposits 24.20%, treasury bills 2.94%, cash equivalents, commercial papers, which make up 65.39% plus others. This action was because the US lawmakers are closely scrutinizing its operations.
Also, Tether started submitting reports about its reserves after it reached a settlement agreement with the NY Attorney General’s Office 5 months ago. The firm has continued to send these reports since then.