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

According to the project’s general counsel, there will be an official audit of Tether, the world’s most popular stablecoin, within months.

An audit for the world’s third largest digital asset has been awaited for several years and increasing regulatory pressure has accelerated the process.

In a rare mainstream media interview on CNBC, Tether CTO Paolo Ardoino and general counsel Stu Hoegner were asked some important questions about USDT support and transparency.

Hogner answered this question by saying:

“We are working towards getting financial audits that no one else in the stablecoins space has done yet.”

Hogner said the firm hopes to be the first to do so and that audits are to come “in months, not years.” He added that Tether is backed face-to-face with its reserves, but acknowledged that these reserves were not all US dollars. According to Hogner, Tether’s reserves are heavily dollar-weighted, but also include 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 is up 195% since the beginning of the year but has lagged behind rivals USDC and BUSD in terms of growth.

Connected: Coin Metrics co-founder takes aim at WSJ’s Tether FUD

Circle released its own Reserve Disclosure Report on July 21, revealing that 61% of USDC reserves were held in commercial paper accounts, treasuries and bonds, along with cash and cash equivalents.

Paxos takes the 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 broadly 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 are ‘stablecoins’ in anything other than the token name “

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

Tether first revealed the breakdown of its USDT support in May, following increased scrutiny from US lawmakers. The firm has been submitting periodic reports about its reserves since a settlement with the New York Attorney General’s office in February.

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