According to Tether’s representatives, an official audit of USDT is expected within a few months.
The market has been waiting for an audit of the third-largest digital asset for years. Increased regulatory pressure seems to have accelerated the process.
In a rarely quoted interview with CNBC, Tether Chief Technology Officer Paolo Ardoino and General Counsel Stu Hoegner were asked some pressing questions about USDT’s reserves and transparency.
Hoegner responded as follows:
“We are working on getting financial audits that no one else in the stablecoin sector has yet.”
He added that the company hopes to be the first to do so and that the audits will take place over the next “months, not years.” Hoegner stated that Tether is backed one-to-one in its reserves, but admitted that they were not entirely denominated in US dollars. According to his statement, Tether’s reserves are weighted in dollars but also include cash equivalents, bonds, loans, cryptocurrency assets and other investments.
USDT’s current market capitalization is $62 billion. It has grown by 195% since the beginning of the year. It lags behind USDC and BUSD in terms of the scale of growth.
Circle released its own report revealing that 61% of USDC’s reserves were held in cash and cash equivalents and the rest in commercial paper and bond accounts.
Paxos criticizes Tether
Tether competitor Paxos has hit back at both Tether and Circle. A post on their blog yesterday says that both companies “are not comprehensively supervised by any financial regulators.”
“Neither USDC nor Tether are regulated digital assets for the simple reason that neither token has a regulator. In fact, neither USDC nor Tether tokens are ‘stablecoins’ in anything other than name.”
Paxos revealed that 96% of their own stablecoin’s reserves are cash and cash equivalents.
The issue of Tether’s reserves in the context of USDT was raised in May, following increased scrutiny from US regulators. Since reaching a settlement with prosecutors general in New York in February this year, the company filed periodic reports on the status of its reserves.