Tether has selected KPMG to conduct a full audit of its $185 billion USDT stablecoin reserves. The El Salvador-based company also hired PwC to prepare internal systems ahead of the review, according to the Financial Times. This development marks the most concrete step yet toward full financial scrutiny for the world’s largest stablecoin issuer. The selection of a Big Four firm signals a major shift in the company’s approach to financial reporting and compliance standards.
The engagement represents a significant departure from the monthly attestations currently published by BDO Italia. A Big Four audit requires a detailed review of assets, liabilities, internal controls and reporting systems. CoinDesk contacted Tether for comment on the matter but received no immediate response regarding the specific timeline. This transition from limited attestations to comprehensive auditing addresses long-standing demands from regulators and institutional partners.
CFO Simon McWilliams previously stated the company was already operating at Big Four audit standards. He confirmed that the audit would be delivered as part of their ongoing compliance strategy during an earlier briefing. This statement aligns with the recent formal engagement with a major auditing firm reported by industry sources. Executives have emphasized that the firm will provide a full financial statement audit rather than just a review of reserves.
The move toward greater transparency aligns with a shifting regulatory backdrop in the United States. The GENIUS Act, signed into law last July, established the first federal framework for stablecoins in the U.S. Tether has already launched a compliant dollar-pegged token, USAT, under this new legislation. This legal framework requires issuers to maintain full reserves and adhere to strict disclosure requirements for public trust.
All this comes as the company prepares for a U.S. expansion and a potential fundraising round. The Financial Times previously reported that Tether faced investor hesitation in efforts to raise $15 billion to $20 billion. Concerns centered on pricing and regulatory risk during the valuation discussions which targeted a $500 billion figure. Market participants remain cautious about the stability of the token amidst changing global economic conditions and policy shifts.
USDT functions as the reserve currency of crypto markets and a major buyer of U.S. Treasury bills. This link between digital assets and traditional financial systems operates at scale with roughly $185 billion in circulation. A full financial statement audit would go well beyond current disclosure practices to include deeper verification. Such verification ensures that the digital token remains fully backed by liquid assets available for redemption at any time.
That level of disclosure has long been a sticking point for critics regarding reserve transparency and historical opacity. In 2021, CoinDesk filed a FOIL request with the New York Attorney General's office seeking documents on USDT's reserve composition. Tether fought the release in court and lost twice during the legal battle spanning two years. The prolonged litigation highlighted the tension between private financial data and public interest in stablecoin backing.
The documents revealed that Tether held the vast majority of its reserves at Bahamas-based Deltec Bank. Heavy exposure to commercial paper issued by Chinese and international banks appeared in the filings from 2023. Specific institutions included Agricultural Bank of China and ICBC, raising questions about counterparty risk. This historical opacity contrasts sharply with the current push for Big Four verification and public reporting.
As stablecoins evolve into core financial infrastructure, North America leads in regulatory frameworks and institutional distribution. Regulated issuers like USDC, RLUSD, and PYUSD are steadily gaining share with RLUSD surpassing $1 billion in market cap. Institutional investors prioritize transparency and compliance in this evolving landscape of digital assets. This shift indicates a maturation of the sector where compliance becomes a competitive advantage over speed and anonymity.
The broader implications involve trust within the crypto ecosystem as it approaches mainstream adoption and integration. Investors will watch closely to see if the audit resolves lingering questions about reserve backing and solvency. Future stability depends on consistent reporting and adherence to emerging global standards for digital currency. Success in this area could pave the way for broader integration into traditional banking systems and payment networks.
