Tether says it is preparing a full audit with a top 12 firm
Chief Technology Officer Paola Ardoino said that their stablecoin is preparing an audit with 12 leading companies.
In early May, Terra’s stablecoin collapsed, hitting USDT a lot. At that time, the value of USDT was reduced to about $0.95 compared to the value it had to maintain of $1.
Ardoino compared Tether’s accompanying dollar redemptions to past bank executions, particularly in Washington Mutual in 2008. He said the $7 billion that Tether acquired in two days had a similar asset ratio – about 10% – to the proportion of deposits withdrawn from Washington Mutual in the ten days before regulators took over the bank.
“We had to go through a stress test that not every bank could successfully withstand, and we passed it spectacularly,” Ardoino says.
Today, an accounting firm called MHA makes quarterly confirmations of its reserves, and Tether is conducting a full audit – something the other stablecoins also lack – but not with one of the four largest auditors, according to Ardoino, as the auditors are concerned about reputational risk, due to the establishment of regulatory definitions for stablecoins.
“I think it’s one of the top 12, so it’s not that bad,” he said. “Four large companies are slightly more cautious about providing a full audit when the rules are unclear.”
Ardoino hopes that Terra’s demise will accelerate the advent of the regulatory framework for stablecoins and their backing. In early June, U.S. Senators Cynthia Lummis and Kirsten Gillibrand made new proposals to the CFTC to recondition cryptocurrencies such as Bitcoin, while reserves for stablecoin support will also be monitored, reinforcing their similarity with banks.
For Tether, it was a welcome development.
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