Bitcoin Global News (BGN)
January 17, 2019 -- ADVFN Crypto NewsWire -- The reason most
stablecoins have not taken off is that they have not been proven to
be stable. Most of you already know of Tether’s reputation as the
most successful and also the most controversial stablecoin, chiefly
because it has never finished a full audit of its’ supposed cash
reserves.
For the better part of 2018, as the
stablecoin niche truly took off, rampant speculation did as well as
to what coin might take Tether’s place and truly legitimize the
idea of stablecoins. Still, as we headed into 2019, it appeared
that no stablecoin would finish any sort of audit of its’ reserves
any time soon.
Even so, any sort of audit takes a
fair amount of time to complete and yesterday, Circle’s stablecoin
team proved why doing so is important. Since the beginning of the
USD Coin project, the company has promised consistent attestations
from the auditing firm, Grant Thornton.
Back in November, they proved that
their coins in circulation in October had been backed equally by US
dollars. Now, according to Grant Thornton’s latest attestation, the
same was true at the end of 2018, even in the midst of the
considerable bear market. Before we go any further, it is important
to make clear that a difference exists between an attestation and a
full audit.
In an overarching sense, this is
that audits aim to make clear that for example, a company’s
accounting falls in line with global standards like Generally
Accepted Accounting Principles. An attestation does not make any
attempt to do this. What they both share in common is the fact that
they provide an auditor’s opinion on whether certain statements
that were made by a company about its’ finances are
true.
Because this is the case, an
attestation can also serve as considerable evidence that a
stablecoin is backed by the cash reserves that its’ holding company
says it has. According to a reaction piece to this announcement
released today via CoinDesk, both Gemini and Paxos have also
produced attestations recently, though they have considerably less
cash reserves overall as compared to Circle. In other words, all of
them have the cash they need to remain stable, but Circle has more
cash in general, meaning that it could issue more
stablecoins.
Perhaps as the year goes on, this
will prove to be the undoing of other, less powerful and even, more
controversial stablecoin teams.
By: BGN Editorial Staff