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PwC Hong Kong Pushes For Stablecoins Auditing

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PwC of Hong Kong partners with Loopring Foundation to push for stablecoins audits.

PwC (PricewaterhouseCoopers) has embarked on an ambitious project as it seeks to explore the best way of issuing stablecoins. The global accounting and consulting firm has teamed up with the non-profit Loopring Foundation as part of the latest push.

Analyzing Stablecoins

PwC Hong Kong will consequently analyze a number of stablecoins as it seeks to gain valuable insights. The firm is also to advise decentralized lending platform Cred, which is currently working on a dollar-pegged coin.

Stablecoins remain the talk of the town given their stability and the underlying assets backing them. Circle has already issued a dollar-backed USDC stablecoins with tech giants like IBM, also believed to be working on similar projects. Likewise, the eruption of new stablecoins comes at a time when Tether appears to be facing a severe lack of trust.

There’s a need for enhanced trust. So we are asking how things would look inside a regulated context; what are the standards, protocols, best practices and how would they fit,said William Gee, PwC’s risk assurance emerging technology leader for China and Hong Kong.

PWC Stablecoins Auditing Debate

Loopring Foundation expects PwC involvement to help drive transparency when it comes to stablecoins. However, the accounting firm involvement continues to arouse some debate. For starters, there is growing talk, that in future, accountancy firms could play an active role in carrying out audits of such coins.

The chatter comes at a time when Tether (USDT) is under immense pressure. Growing concerns over the actual amount of dollars backing the altcoin have all but continued to fuel a sell-off of the coin. PwC is currently conducting an audit of Tezos (XTZ) awaiting to see if Tether will also experience a similar scrutiny.

Tether evoked serious concerns and doubts early in the year after it parted ways with accounting firm Friedman LLP. The move came even before the audit firm was able to complete a full audit of the blockchain project.

While Tether has repeatedly reiterated that the U.S dollar backs its coins, the firm is yet to provide conclusive evidence. Consequently, an audit should go a long way in providing appropriate answers to the ongoing standoff.

Auditing of stablecoins is gaining traction, seen as one of the best ways of addressing some of the underlying issues. For starters, such actions will go a long way in addressing know-your-customer (KYC) compliance requirements. Similarly, auditing will go a long way in ensuring that such projects adhere to money laundering (AML) regulations.

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