The stablecoin Tether (USDT), is preparing to conduct an audit with one of the top 12 firms in the crypto asset field with the aim of providing greater transparency in its reserves, according to a report.
The company is working with MHA, a firm that offers reserve certifications, to conduct a comprehensive audit to strengthen confidence in its stability.
According to Paolo Ardoino, Tether’s chief technology officer, transparency regarding reserves is something that other stable cryptocurrencies also lack.
Ardoino told Euromoney in an interview that his firm will not conduct the audit with one of the big four companies dedicated to accounting and auditing cryptoassets (Deloitte, EY, PwC and KPMG), given that the purpose is to alleviate concerns about the risk caused by the absence of legislative regulations on stablecoins and cryptocurrencies, so he estimates that an audit by MHA will generate greater reliability.
“I think its one of the top 12, so not that bad. ,” Ardoino said of MHA. “The big four are a bit more cautious about providing a full audit when the rules are not clear.”
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According to Euromoney data, Tether’s value fell as much as 95 cents on some of the exchange platforms as the value of a competing stablecoin known as TerraUSD and its sister token LUNA plummeted.
However, despite the cryptocurrencies’ plunge, Tether has shown that it can maintain a one-to-one peg to the U.S. dollar, providing signs of stability that result in confidence for investors.
Terra’s collapse opens up doubt about the chances of success sellers might have in betting against Tether. However, Ardoino is optimistic, and believes the issue could lead to a rapid development of a legal regulatory framework for cryptocurrencies and their backing.
“We showed that in the worst-case scenario – when there was Terra crumbling, the entire crypto market crumbline and stock market was going down – we got a tonne of requests of withdrawals, and we honored them within minutes,” Ardoino said. “If you market something as a stablecoin, it should be stable, full stop. You cannot have a guy who wakes up in the morning and creates a new cryptocurrency, backed by another cryptocurrency, backed by goodwill, and call it a stablecoin.”
Ardoino had previously said that Terra’s creation of a token and a stable coin was a “recipe for disaster” and that, with LUNA acting as its biggest collateral, it was inevitable that the stable coin would lose its parity with the dollar once the token collapsed.