Tether General Counsel Stuart Hoegner has confirmed that a full review of stablecoins operations will take place in the coming months. This comes after many reviews and allegations the company has received that its USDT native token is not backed by real US dollars.
To keep critics at bay, the company plans a full review of its operations. This was revealed in an interview on CNBC with Tether CTO, Paolo Ardoino and Hoegner.
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What Hoegner said about testing Tether
In response to questions about the USDT’s support and transparency, Hoegner said, “We are working to obtain financial audits that no one in the stablecoin sector has done before. We hope to be the first to do this, and it will be in months, not years. “
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He reiterated that Tether is one-to-one hedged with its reserves, but also admitted that the reserves were not entirely made up of US dollars. He explained that the company’s reserves are heavily weighted in dollars, but also include cash equivalents, bonds, secured loans, crypto assets, and other investments.
A competing stablecoin company, Paxos, criticized both Tether and Circle in a blog post, stating that they are “not fully overseen by any financial regulator.” Paxos said this after it was revealed that 96% of its stablecoin reserves are cash or cash equivalents.
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What you should know
- Tether is a stablecoin in cryptocurrency that is pegged to the US dollar. The company that operates it, Tether Inc. claims the coin is backed by US dollar reserves on deposit by people who wish to have the coin and it is redeemable at any time. This means that every time someone deposits a US dollar into Tether’s account, Tether Inc. creates a Tether Coin in exchange.
- As a result of Tether’s failure to deliver documents to aid a US government fraud investigation in New York, many have come to the conclusion that its coins are not fully backed by US dollars and have left the company with compared to the Federal Reserve, which prints money out of thin air.
- Tether is the largest stablecoin with a market cap of $ 61.9 billion and the third largest cryptocurrency asset with only Bitcoin and Ethereum ahead of the coin. It has grown by 195% since the beginning of the year.
- Tether had previously announced its USDT support in May after US lawmakers intensified its scrutiny. The firm has made regular reports on its reserves since reaching an agreement with the New York attorney general in February, but that’s not enough to keep critics at bay. The coin is still paired 1: 1 to the US dollar.