Cryptocurrencies

Tether promises an audit in ‘months’ as Paxos claims USDT is not a true stablecoin

There will be an official audit of the world’s most popular stablecoin, Tether, in a few months, according to the project’s general counsel.

An audit for the world’s third-largest digital asset has been awaited for several years, and increased regulatory pressure appears to have accelerated the process.

In a rare media interview On CNBC, Tether CTO Paolo Ardoino and Attorney General Stu Hoegner received some urgent questions on the issue of USDT endorsement and transparency.

Hoegner responded to the question by saying:

“We are working towards financial audits, something that no one else in the stablecoin industry has done yet.”

Hoegner added that the firm hopes to be the first to do so and that the audits will take place in “months, not years.” He said that Tether is backing one-to-one with its reserves, but admitted that those reserves were not all in US dollars. According to Hoegner, Tether’s reserves are heavily weighted in dollars, but they also include cash equivalents, bonds, secured loans, crypto assets, and other investments.

USDT’s current market capitalization is 62 billion based on Tether transparency report. It has grown 195% since the beginning of the year, but has lagged behind rivals USDC and BUSD in terms of growth.

Related: Coin Metrics Co-Founder Targets WSJ’s Tether FUD

Circle published its own reserve disclosure report on July 21, revealing that 61% of the USDC’s reserves were held in cash and cash equivalents and the remainder in commercial paper accounts, treasuries and bonds.

Paxos takes a hit

In a related development, rival stablecoin company Paxos hit both Tether and Circle on July 21. blog post claiming that “they are not exhaustively supervised by any financial regulator.”

“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 its own stablecoin reserves are cash or cash equivalents.

Tether first revealed a collapse of its USDT endorsement in May, following increased scrutiny by US lawmakers. The firm has been filing regular reports on its reservations since it reached an agreement with the New York Attorney General’s Office in February.

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