Tether Appoints BDO Italia for Monthly Proof-of-Reserve Reports

Tether, the world’s largest stablecoin, said on Thursday it had appointed accounting firm BDO Italia to vouch for its asset reserves, and aims to publish its reports monthly rather than quarterly by the end of the year. Stablecoins are a type of cryptocurrency designed to keep constant value, such as a 1:1 US dollar peg. They are widely used to move funds between different cryptocurrencies or into regular cash.

Tether says its coin maintains its value by holding dollar-denominated reserves to match or exceed the value of Tether coins in circulation. These reserves have long been the subject of scrutiny which sharpened after crypto markets’ sell-off in May following stablecoin TerraUSD’s collapse.

Tether, run by a British Virgin Islands company, has in recent years published reports in which accountancy firms attest to the size of its reserves. The reserves totalled $82.4 billion (roughly Rs. 6,57,100 crore) as of March 31, of which $39 billion (roughly Rs. 3,11,100 crore) was in US Treasuries and $20 billion (roughly Rs. 1,59,500 crore) in commercial paper.

The most recent two reports were by a Cayman Islands firm, MHA Cayman. Before that, Tether used another Cayman Islands firm, Moore Cayman, its website shows.

BDO Italia is an audit and assurance company based in Italy, an independent member firm of BDO International Limited. Tether management includes at least two executives from Italy. Most team members are based in Europe and the Bahamas, where most the reserves are kept, Chief Technology Officer Paolo Ardoino told Reuters.

Tether said in a statement it started working with BDO Italia in July, adding the relationship is “the next step in the company’s path towards a complete audit”.

“Our community asked over time to improve the auditing firm that we’re using because they felt like they wanted something bigger,” Ardoino said.

Tether will have cut its holdings of commercial paper to $200 million (roughly Rs. 1,600 crore) by the end of August, Ardoino added, down from $8.4 billion (roughly Rs. 67,000 crore) on July 1. He did not specify which assets these funds had gone into instead.

© Thomson Reuters 2022