The cryptocurrency market took an important step towards transparency last week.Tether Limited, stablecoin issuer USDT — the world’s third-largest cryptocurrency by market capitalization — announced that it has hired the audit giantsKPMG LLP e PwCto carry out a comprehensive audit of your reservations, which currently add$184 billionThis is the first time the company has submitted its balance sheets to a large-scale independent audit, after years of criticism over lack of clarity in its reservations.
Unprecedented audit: Why did Tether decide to open your data?
Tether has been the target of speculation and market distrust for years.Since its inception in 2014, the company has always claimed that every USDT issued is traded in U.S. dollars in a ratio of 1:1.The U.S. Securities Commission (SEC), questioned whether the company's reserve actually covered the entire volume of currencies in circulation. In 2021, Tether paid a fine of$41 millionthe SEC for allegations that its reserves included undisclosed assets, such as private debt securities and commodities.
In the wake of the decision to hire two of theThe four largest auditors in the worldThe “Big Four” represents a strategic move to regain lost credibility.Forklog, KPMG will be responsible for auditing the dollar reserves, while PwC will operate in complementary areas such as compliance and risk management.
The initiative comes at a crucial moment for the stablecoins ecosystem, which has moved more than$12 trillionby 2023, according to data from theChainalysisIn Brazil, USDT is widely used for trading cryptocurrencies on exchanges such asBinance, Bitcoin Market and FoxbitRepresenting about40% of all digital currency transactionsIn the country, according to theAnnual Report of the Brazilian Crypto Asset Market (2023)Brazilian Association of Cryptocurrencies and Blockchain (ABCB)
Impact on the market: what does this change for Brazilian investors?
The transparency of Tether has direct implications for the Brazilian market, which is among theTop 10 Countries in Crypto Trading VolumeUSDT is the main bridge for Bitcoin (BTC) and Ethereum (ETH) transactions, as well as being used in DeFi (decentralized finance) applications and international payments. With the audit, a reduction in market volatility and greater confidence from institutional investors is expected, who previously avoided direct exposure to stablecoin due to lack of clarity.
In addition, the measure can influence Brazilian regulators, such as theThe Securities Commission (CVM)and OCentral Bank of Brazil (BCB)For example, in the case of stablecoins, Brazil does not yet have a specific regulation for stable currencies.Draft Law 4.401/2021, which deals in Congress, proposes stricter rules for stablecoins issuers, including independent audit requirements.Tether's initiative can speed up this process by aligning the Brazilian market to international standards.
Another important point is the impact on Brazilian brokers.Exchanges such as BitPrice and CoinextThey have already begun to include warnings about USDT risks in their terms of use, but a successful audit could reduce these warnings and even attract new investors.Journal of CoinTether plans to publish its first audit results in 2024, which is expected to bring more clarity to the industry.
What is missing for Tether to regain full credibility?
Despite the progress, experts warn that the audit will not solve all doubts. Tether still needs to demonstrate that its reservations do not include high-risk or unliquid assets, such as properties or bonds from low-rated companies. In addition, the company will face charges from regulatory bodies such as the SEC, which has already signaled interest in closely monitoring the results.
In Brazil, trust in USDT also depends on local factors, such as currency stability and exchange regulation.Regulatory Instruction 1.888/2020, which forces brokers to report suspicious money laundering operations, the Brazilian market goes through a process of professionalization.In this context, Tether’s transparency can be a divider for the industry.
For the Brazilian investor, the news represents a temporary relief, but should not be seen as a signal to increase exposure to USDT without prior analysis. The audit is an important step, but the crypto asset market remains volatile and subject to regulatory risks. The recommendation for those operating in the industry is to stay informed about the unfoldings and diversify their reserves in other stablecoins, such as USDC (USD Coin) or DAI, which already have independent audits for a longer time.
If the results are positive, the stablecoins market could enter a new phase of maturity, benefiting not only Tether, but the entire cryptocurrency ecosystem in Brazil and the world.