Tether will conduct audits to negate the transparency claims and concerns after it declared an official audit in a few months as reported in our previous Tether news.
USDT is the most popular stablecoin that is in the third position in global digital assets and it’s on blockchain that cybersecurity experts see an unhackable with the majority trusting its security. However, most people in the crypto community were waiting for a financial audit of the stablecoin but now it seems that the ongoing regulatory issues in the crypto space galvanized the Tether team into auction and as a result, they are declaring that an audit will happen soon.
Another incident was the interview where Tether’s CTO Paolo Arduino and Stu Hoegner talked about USDT’s transparency and backing. In response, the general counsel stated that the team is working to be the first on the market to get these financial audits. They mentioned that the audits will come in months and as for backing, he stated that the stablecoin is backed with reserves. Hoegner mentioned that some of the reserves are not US dollars but they are more US dollars along with other cash equivalents, bonds, crypto assets, and others. However, in the report published by TEther, the market for USDT stands at $62 billion and even though the number has increased by 195% since 2021 started, it is behind competitors like USDC and BUSD.
When Circle released a reserve report, it showed that 61% of USDC reserves are cash and cash equivalent with the remaining 39% in treasuries, bonds, and commercial paper accounts. Paxos as Tether’s rival attacked the stablecoin and Circle via the blog post and it claimed that the duo is not operating under financial regulators. Both USDC and Tether are simply Stablecoins in names alone. Tether will conduct audits to prove them all wrong. Paxos disclosed that its stablecoin reserves are a combination of cash equivalents to support the claims but it did say that the total backing that USDT has, were 3.87% cash, 24.20% fiduciary deposits, 2.94% treasury bills, and others. The action was because US lawmakers are scrutinizing operations heavily.
Tether started submitting reports about the reserves after it reached a settlement agreement with the NY attorney general’s office and the company has continued to send these reports ever since.
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