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Tether’s general counsel stated that a full audit will be completed in the coming months.
According to the project’s general counsel, an official audit of the world’s most popular stablecoin Tether will take place within months.
The world’s third-largest digital asset has been awaiting an audit for some years, and rising regulatory pressure appears to have sped up the process.
In a rare mainstream media interview on CNBC, Tether CTO Paolo Ardoino and general counsel Stu Hoegner were asked some pressing questions on the subject of USDT’s backing and transparency.
Hoegner responded to the question by saying:
“We are working towards getting financial audits, which no one else in the stablecoin sector has done yet.”
Hoegner went on to say that the firm hopes to be the first to do so, adding that audits will take “months, not years” to complete. He claimed that Tether is backed one-to-one by its reserves, but confessed that they were not all in US dollars. Tether’s reserves are mainly dollar-weighted, according to Hoegner, but they also contain 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 by 195% since the beginning of the year but has lagged behind rivals USDC and BUSD in terms of growth.
On July 21, Circle released its own reserves disclosure report, disclosing that cash and cash equivalents were up 61% of USDC’s reserves, with the rest kept in commercial paper accounts, treasuries, and bonds.
Paxos takes a swipe
In a related development, rival stablecoin company Paxos took a swipe at both Tether and Circle in a July 21 blog post claiming that they are “not comprehensively overseen by any financial regulators.”
“Neither USDC nor Tether is a regulated digital asset, 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 disclosed that cash or cash equivalents account for 96% of their stablecoin reserves.
Following heightened scrutiny from US lawmakers, Tether disclosed a breakdown of their USDT backing for the first time in May. Since striking a settlement with the New York Attorney General’s Office in February, the firm has been producing quarterly updates on its reserves.