New Partnership Allows TrueUSD Traders to Audit The Coin’s Backing Assets
A new partnership between stablecoin TrueUSD (TUSD) and accounting firm Armanino purportedly allows traders to conduct instant audits of the token’s backing. The news was announced by TrueUSD in a blog post on Mar. 5.
The dashboard developed by Armanino purportedly enables traders to monitor TrueUSD token balances and collateralized funds. “Armanino connects directly to third-party escrow accounts holding the U.S. dollars that collateralize TrueUSD tokens, and runs their own ETH nodes to ensure accurate TUSD token supply,” the post details.
Rafael Cosman, Co-founder and Head of Engineering and Product at TrustToken, said that “with real-time confirmation of funds provided by one of the world’s leading accounting firms, traders will know at all times that their tokens are backed by real-world value.”
Stablecoins are cryptocurrencies that are backed by a physical asset, fiat currency, or even an algorithm, and are generally more stable in value than other crypto assets. TrueUSD is backed 1:1 with U.S. dollars.
The move by TrueUSD was taken in a bid to bring more transparency to stablecoins, as there have been doubts that some stablecoins actually have enough fiat in reserve to redeem all tokens with the backing assets, should the need arise.
Last year, stablecoin Tether (USDT), which is pegged to U.S. dollar, fell under scrutiny from the cryptocurrency community after it broke its connection with an auditor firm before the official audit was released. Without an audit, it could not be proven that Tether in fact has enough reserves, or that they are not being used for something besides backing Tether tokens.
Later, Tether’s long-contested assertion that its digital currency is backed by the appropriate amount of dollars was seemingly confirmed. An audit was purportedly conducted and completed by law practice Freeh Sporkin & Sullivan LLP (FSS). While the audit reportedly found the proper amount of reserves, FSS noted in a statement:
“FSS is not an accounting firm and did not perform the above review and confirmations using Generally Accepted Accounting Principles […] FSS has assumed, without further inquiry, that the bank personnel providing the confirmations were duly authorized to provide such confirmations, and that the confirmations were correct.”
At press time, market capitalization of TrueUSD is around $205 million, according to CoinMarketCap. It is currently the third largest dollar-pegged stablecoin behind USDT and USD Coin (USDC), which have market capitalizations of $2 billion and $240 million, respectively.