Tether reserve attestations to be conducted by major European accounting firm

Published at: Aug. 18, 2022

In a step toward greater transparency and better alignment with international accounting standards, stablecoin operator Tether Holdings Limited has tapped BDO Italia to conduct regular reviews and attestations of its dollar reserves.

Tether, which operates the USDT stablecoin, officially began working with BDO Italia in July, the company disclosed on Thursday. BDO Italia will be responsible for conducting an independent review of Tether’s stablecoin reserves to ensure that each unit of USDT is backed by cash or cash equivalents. Through BDO’s reviews, Tether aims to release public attestation reports monthly instead of quarterly. The attestations will include updates about the number of USDT tokens issued, as well as the company's reserves.

BDO Italia is the Italian arm of BDO Global, an international network of public accounting firms that maintains its headquarters in Zaventem, Belgium. BDO Global ranks among Europe’s five largest accounting firms by total revenue. The company maintains offices across North and South America, Europe, the Middle East and North Africa, and the Asia-Pacific region.

Tether is looking to eventually get rid of commercial paper backing for its U.S. dollar-based stablecoin “without any incurrences of losses.” The firm expects to decrease its volume from $11B to $8.4B by the end of June. https://t.co/IzzjTKnpPq

— Cointelegraph (@Cointelegraph) June 15, 2022

Paolo Ardoino, Tether’s chief technology officer, said his company’s pledge to offer more transparency reflects its growing mandate beyond just offering liquidity to crypto traders:

“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 began publishing quarterly attestations of its stablecoin reserves in May 2021 as part of a settlement with the New York Attorney General’s Office in February of the same year. Tether had previously passed several assurance tests conducted by local accounting agency Moore Cayman that its reserves exceeded liabilities.

Tether’s initial attestations showed that a sizable portion of its reserves was backed by commercial paper. The company later announced plans to reduce its commercial paper exposure to zero. It was estimated that, by the end of July, Tether’s commercial paper holdings would be worth roughly $3.5 billion, down from $20.1 billion in March.

USDT remains the single largest stablecoin by market capitalization at $67.6 billion, according to CoinMarketCap. After a three-month downtrend, the supply of USDT began to tick up gradually in August, providing cautious optimism that the cryptocurrency market was turning a corner.