BDO Italia audits Tether reserves to release monthly attestation

abdelaziz Fathi

World’s largest stablecoin issuer, Tether has switched the accounting firm that audits the massive reserves that back its USDT token to BDO Italia, the 5th largest accounting firm in the world.

Tether

Tether officially began working with BDO Italia in July 2022 for its quarterly attestations. With this alignment, the issuer will be moving towards the release of its attestations from a quarterly basis to monthly reports.

Onboarding a major accounting firm, which can be held accountable by third parties for financial information, to engage in an audit of a crypto token was also a notable success for Tether’s initiative. The developing nature of the cryptocurrency industry, combined with the lack of regulatory oversight, makes the potential risk associated with a comprehensive audit of USDT or any other crypto asset too high for accountancy firms.

Tether seeks to reassure investors that its cryptocurrency is backed by U.S. dollars after the major stablecoin has been dogged by speculation that it holds insufficient capital to support its market cap of USDT.

Paolo Ardoino, CTO of Tether, comments: “We are committed to serving the fast-growing cryptocurrency market as the strongest stable asset in the Web3 economy. The utility of Tether has grown beyond being just a tool for quickly moving in and out of trading positions, and therefore it is mission-critical for us to scale alongside the peer-to-peer and payments markets. Tether’s commitment to transparency is not something new. It aligns with its leadership’s responsibility as a market leader to educate the world about stablecoin technology.”

Tether zeros exposure to Chinese commercial paper

While the landscape for stablecoins is still in its infancy, its potential has led the world’s leading accounting firms to explore ways to implement the emerging technology in their work. Also, other professional services providers have been eyeing this trend for quite some ‎time as Bitcoin, and other established cryptocurrencies have now been more broadly accepted ‎as forms of settlement.‎

The development also comes at a time of major declines in the broader cryptocurrency market, which has led crypto firms to fail and erase billions of dollars of digital assets.

Demand for stablecoins in the e-commerce and payment space has been surging as the fiat-backed tokens allow users and merchants to avoid volatility. Moreover, online retailers and payment gateways benefited from faster, cheaper transactions as compared to credit cards and traditional payment systems.

This trend was driven by growing interest in decentralised finance (DeFi) and OTC desks that use the token to settle block trades over-the-counter.

As the company continues to face questions about what its USDT token is actually backed by, Tether has been reducing the amount of corporate debts in its reserves.

Per its own statics, Tether’s portfolio holds no Chinese commercial papers and as of July, its total commercial paper exposure has been reduced yet again to a mere ~$3.7 billion (from $30 billion in July 2021). The company also plans to further decrease to ~$200 million by the end of August 2022 and to zero by end of October/early November 2022.

In absolute terms, the value of these instruments dropped by more than $24 billion. Additionally, Tether reduced its cash assets, from $7.2 billion to $4.2 billion.

Read this next

Digital Assets

BlackRock digs further into crypto with metaverse ETF

BlackRock, the world’s largest asset manager with almost $10 trillion in AUM, is set to launch a new metaverse ETF to help investors securely monetize on the booming immersive version of the internet.

Digital Assets

Binance wins license in New Zealand as rival Huobi shutters derivatives

Binance, the world’s largest crypto exchange by traded volume, has obtained licenses to operate in New Zealand, even after rival Huobi shutdown derivatives trading last month due to concerns about regulations.

Retail FX

Hong Kong busts perpetrators of ‘ramp and dump’ scam

Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), has charged thirteen suspects of market manipulation in a joint operation with the local police.

Institutional FX

TradingView integrates market data from German Tradegate exchange

TradingView announced that it ‎has increased data coverage to allow its users to receive information from ‎and get free access to the intra-day and tick data from Tradegate Exchange.

Retail FX

Spotware Systems introduces Custom Push Notifications for cTrader mobile apps

Spotware Systems, a technology provider for the electronic trading industry, is introducing a new push notification feature to alert mobile users of price swings and market fluctuations through their cTrader app.

Market News

The Week Ahead: 30 September from David Madden, Market Analyst at Equiti Group

Sterling dominated the headlines last week, as there were concerns the UK government might struggle to service its debt.

Inside View

How does the quality of signal providers affect your business?

A must-have onboarding process for brokers with investment services like PAMM, MAM, or copy trading

Technology

DBS deploys Nasdaq Trade Surveillance

“The confidence that markets and our clients have in DBS as a safe and trusted banking group is anchored on our ability to detect and respond to anomalous activity, which in turn calls for a robust surveillance and prevention infrastructure.”

Industry News

SEC charges Justin Costello and David Ferraro for securities fraud and posing as billionaire veteran

The Securities and Exchange Commission charged Cannabis executive Justin Costello and David Ferraro, an associate of Costello’s, for promoting the stock of several microcap companies on social media without disclosing their own simultaneous stock sales as market prices rose.

<