Stablecoin issuer Tether said it would hire one of the “Big Four” accounting firms to conduct a full audit of its reserves for the first time.
In a Tuesday notice, Tether said that the accounting firm — which it did not disclose — would complete a “full independent financial statement audit” for the stablecoin issuer, including for its US dollar-pegged USDt (USDT).
The accounting industry’s so-called “Big Four” are Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers.
Tether said the firm was “selected through a competitive process,” according to chief financial officer Simon McWilliams. Cointelegraph reached out to the company for comment but had not received a response at the time of publication.
The audit will include a review of its assets, reserves, and tokenised liabilities, as well as an “assessment of Tether’s systems, internal controls, and financial reporting.”
“For the hundreds of millions of people and businesses who rely on USDT every day, this audit is not just a compliance exercise; it is about accountability, resilience, and confidence in the infrastructure they depend on,” said Tether CEO Paolo Ardoino.
With a market capitalization of about $184 billion, as of Tuesday, USDT is the largest stablecoin in the crypto industry, more than twice the size of Circle’s USDC (USDC) $78 billion market cap. However, a report from Japanese investment bank Mizuho earlier this month said that Circle’s stablecoin overtook USDT in transaction volume for the first time since 2019.
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Why are Tether’s reserves under scrutiny?
According to the stablecoin issuer, all of its tokens “are pegged at 1-to-1 with a matching fiat currency and are backed 100% by Tether’s Reserves.” Ardoino has previously disclosed that a significant portion of its reserves consisted of US Treasurys, but reports from BDO Global also showed holdings of physical gold, Bitcoin (BTC), and secured loans.
Concerns about Tether’s financial stability made headlines in December after BitMEX founder Arthur Hayes warned the USDT issuer could face serious trouble if the value of its reserve assets were to fall. But CoinShares’ head of research, James Butterfill, pushed back on those claims.
The notice of a full audit came months after the passage of the GENIUS Act in the United States, establishing a framework for payment stablecoins. Tether launched its USAt stablecoin in January to be GENIUS-compliant under the federal law, with Anchorage Digital Bank serving as the issuer.
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