Tether Seeks Big Four Audit Amid US Stablecoin Regulations

Tether, the issuer of the world’s largest stablecoin, is reportedly in discussions with the Big Four accounting firms to conduct a third-party audit. This move comes as the company prepares for upcoming stablecoin regulations in the US, which mandate such audits for future cooperation with the government. Tether CEO Paolo Ardoino has emphasized the importance of this audit, stating that it is now feasible due to the changing regulatory landscape and the US government's focus on stablecoins.

However, there is skepticism within the community regarding Tether's commitment to a full audit. Despite regular internal reports and years of promises, Tether has never submitted to a third-party audit. Some speculate that the firm may attempt to secure a reserve-only audit, but the Big Four accounting firms are likely to insist on a comprehensive audit. Ardoino's comments about the US President's priorities have raised questions about why such an incentive would be necessary for a routine audit, given Tether's substantial profits.

The upcoming stablecoin regulations, as proposed in the GENIUS Act, require stablecoin issuers to undergo independent audits and hold a significant portion of their reserves in assets like Treasury bonds. This means that without an audit of their US Treasury-based reserve assets, stablecoin issuers will not be able to operate in the US market. Tether has already purchased $33 billion in Treasury bonds last year, but 99% of these are held by Cantor Fitzgerald, a firm with long-standing ties to Tether. The political connections and substantial Treasury holdings have drawn criticism, with some calling for a ban on Tether's Treasury purchases until they undergo thorough audits.

Despite these political ties and financial assets, Tether's US presence remains at risk unless it passes an audit as mandated by the forthcoming regulations. The company's ability to form a serious partnership with the US government hinges on its willingness to undergo a large-scale public audit. The outcome of these discussions with the Big Four accounting firms will be crucial in determining Tether's future compliance with US regulations and its continued operation in the US market.