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

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

An audit of the third largest digital asset in the world has been expected for several years and increased regulatory pressure appears to have accelerated the process.

In a rare interview with mainstream media on TBEN, Tether CTO Paolo Ardoino and General Counsel Stu Hoegner were asked about USDT’s support and transparency.

Hoegner answered the question by saying:

“We’re working hard to get financial audits, which no one else in the stablecoins business has done yet.”

Hoegner added that the firm hopes to be the first to do so and that the audits will come in “months, not years.” He said Tether is individually backed with its reserves, but admitted that not all of those reserves are in US dollars. According to Hoegner, Tether’s reserves are heavily weighted in dollars, but also include cash equivalents, bonds, guaranteed loans, crypto assets and other investments.

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The current market capitalization of USDT is 62 billion according to Tether’s transparency report. It has grown 195% year-to-date, but has lagged behind its competitors USDC and BUSD in terms of growth.

Related: Coin Metrics Co-Founder Goes For WSJ Tether FUD

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

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Paxos takes a hit

In a related development, rival stablecoin firm Paxos swept Tether and Circle in a July 21 blog post claiming they are “not fully overseen by financial regulators.”

“Neither USDC nor Tether is a regulated digital asset, for the simple reason that no token has a regulator. In fact, neither USDC nor Tether are “stablecoins” other than by name. “

Paxos has revealed that 96% of its own stablecoin reserves are cash or cash equivalents.

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Tether first revealed a breakdown in its support for the USDT in May, following extensive scrutiny by U.S. lawmakers. The company has been submitting periodic reports regarding its reservations since it struck a deal with the New York attorney general’s office in February.

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