Tether (USDT) is set to make significant strides in transparency by consulting with a leading Big Four accounting firm to conduct a comprehensive audit of its asset reserves.

This move aims to confirm that Tether's USDT (Tether USD) is maintained at a 1:1 backing ratio, a reassurance that has become increasingly crucial in light of industry trepidations regarding liquidity crises similar to those experienced by FTX.

Stablecoin issuer Tether is set to take a significant step toward greater transparency by engaging a Big Four accounting firm to conduct a full audit of its asset reserves, aiming to confirm the 1:1 backing of its USDT (Tether USD) tokens, a report by Bloomberg has revealed.

This move comes as the industry grapples with the implications of liquidity crises, such as those encountered by FTX, rendering this confirmation of USDT’s backing at a 1:1 ratio is more crucial than ever.

Tether’s CEO, Paolo Ardoino, expressed optimism that the pro-crypto administration under former President Donald Trump will facilitate the swift processing of the audit. Referring to the attention from the highest levels of government could influence Big Four firms to prioritize the audit, thus instilling greater confidence among investors.

“If the President of the United States says this is a top priority for the U.S.,” Ardoino elaborated, “Big Four auditing firms will have to listen.”

Currently, Tether provides brief quarterly reports and has not undergone a full independent annual audit, which would offer more extensive assurances over the company’s finances.

While Ardoino did not disclose which specific Big Four firm—PricewaterhouseCoopers (PwC), Ernst & Young (EY), Deloitte, or KPMG—would be engaged for this process, the expectation is that Tether’s first full audit will serve as a crucial step toward building trust with investors and regulators alike.

In other news, Tether reported staggering profits of $13.7 billion in 2024, highlighting the robustness of USDT, which is designed to maintain a stable value by being pegged to the U.S. dollar at a ratio of 1:1.

As such, each USDT token is purportedly backed by reserves that encompass traditional currencies, cash equivalents, and a variety of other assets.

However, this assertion of 1:1 backing has become a point of contention, with industry figures like Cyber Capital’s Justin Bons openly criticizing Tether for its lack of transparency.

Bons went so far as to label Tether “one of the biggest existential threats to crypto,” highlighting the unsettling nature of having to take Tether’s assertion of holding $118 billion in collateral at face value, especially after the U.S. Commodities and Futures Trading Commission (CFTC) previously fined Tether for misrepresenting its reserves in 2021.

Furthermore, the organization Consumers’ Research released a report that expressed concerns about Tether’s transparency, urging the company to submit to an exhaustive financial audit.

This report also highlighted the organization’s lobbying efforts to fend off new regulations that could restrict its operations.

As Tether navigates these challenges, it faces strategic hurdles due to new European regulations compelling exchanges like Crypto.com to delist USDT and other tokens to comply with the Markets in Crypto-Assets (MiCA) framework.

A spokesperson for Tether expressed disappointment over these developments, questioning the clarity and rationale behind the regulatory actions that prompted such moves.

In a proactive effort to prepare for the forthcoming audit, Tether recently appointed Simon McWilliams as chief financial officer.

This strategic hiring underscores Tether’s intent to enhance its financial governance and accountability amidst rising scrutiny from regulators and consumers.

As Teather prepares for its first full audit, the attention focused on its operational transparency and financial integrity will undoubtedly shape the future of not only its business but the broader landscape of cryptocurrency—a sector rapidly grappling with trust issues and the imperative for accountability.