Tether Hires KPMG for First Full Audit as U.S. Stablecoin Rules Take Shape

According to a recent report in the Financial Times, Tether has hired KPMG to perform a full audit of the reserves that support its $185 billion USDT stablecoin. This is a significant change in how Tether usually handles financial reporting and suggests that new laws being considered in the U.S. are starting to influence even well-established companies in the cryptocurrency industry.

Previously, Tether provided limited financial reports verified by smaller auditing firms – a much lower level of review than what’s required for traditional banks and financial companies. Now, Tether has hired KPMG to conduct a comprehensive audit, looking at everything from its assets and debts to its internal controls and financial reporting. To get ready for this in-depth audit, Tether also brought in PwC for advice – marking the first time they’ve worked with two of the largest accounting firms at the same time. As of their latest report, Tether holds about $193 billion in assets and $186.5 billion in liabilities, leaving over $6 billion in extra reserves. Most of these reserves (around 82%) are held in short-term U.S. Treasury bills, with smaller amounts in Bitcoin and gold.

There’s a lot of money at stake for Tether. They were planning to raise between $15 and $20 billion, potentially valuing the company at $500 billion, but those plans are paused until an audit is completed. If the audit firm KPMG gives a positive review, it could make it easier for large companies and banks to start using Tether’s USDT. However, it’s important to remember that Tether previously paid a $41 million fine in 2021 for being misleading about its financial reserves, and some experts remain skeptical despite any positive audit results.

What the GENIUS Act Demands

This audit is primarily a result of the GENIUS Act, which became law in July 2025. This act created a national set of rules for companies issuing payment stablecoins in the United States. According to the law, only approved issuers – including bank subsidiaries, non-bank companies approved by the Office of the Comptroller of the Currency (OCC), and smaller state-chartered issuers with less than $10 billion in circulation – can operate in the U.S. Larger issuers, exceeding $10 billion, will need to be overseen at the federal level by the OCC.

Stablecoin issuers face strict rules about the reserves backing their coins. They must hold at least as much in reserves as the value of the stablecoins they’ve issued, and those reserves can only be in the form of U.S. currency, funds held at the Federal Reserve, or short-term U.S. Treasury bills (maturing in 93 days or less). They cannot lend out these reserves. Issuers must file monthly reports on their reserves, verified by an independent auditor, and those issuing over $50 billion in stablecoins (like Tether) must also undergo annual financial audits following U.S. accounting standards. The CEO and CFO are legally responsible for the accuracy of these reports and could face criminal charges for false statements. If a stablecoin issuer goes bankrupt, stablecoin holders have first claim on the reserve assets. Furthermore, these issuers are considered financial institutions and must comply with anti-money laundering laws, including reporting requirements. Finally, they are not allowed to pay any interest or returns to stablecoin holders.

Tether’s U.S.-Only Play: USAT

Alongside the ongoing audit, Tether has prepared a compliance solution for the U.S. market. Called USAT, this new stablecoin launched on January 27, 2026, and is designed for use by American financial institutions. It’s issued by Anchorage Digital Bank, a U.S.-chartered and federally regulated bank, with Cantor Fitzgerald holding its reserves. The operation is based in Charlotte, North Carolina, and is headed by Bo Hines, who previously led the White House Crypto Council.

As of March 2026, USAT has a circulating supply of around $28 million. While much smaller than USDT, it’s a new product, launched less than two months ago, and is designed for a different market. Currently available on exchanges like Kraken, OKX, Crypto.com, and Bybit as an ERC-20 token on Ethereum, USAT isn’t meant to replace USDT. According to Tether CEO Paolo Ardoino, USAT offers a separate, regulated option – USDT will continue serving everyday users worldwide, while USAT focuses on U.S. broker-dealers, companies managing funds, and institutions needing to comply with U.S. regulations. Experts see USAT as a competitor to Circle’s USDC, which has traditionally been the leading regulated stablecoin for institutions.

The CLARITY Act: Still Unresolved

As a crypto investor, I was pretty excited when the Digital Asset Market Clarity Act passed the House last July. It felt like a big step towards clear rules for the whole market. But now it’s stuck in the Senate, and it’s frustrating! The whole thing is being held up by a disagreement over whether people should be able to earn rewards on their stablecoins. It’s a pretty specific issue, but it’s enough to derail what could be really positive legislation for the industry.

The proposed bill includes a ban on ‘passive yield,’ meaning platforms can’t pay users simply for holding stablecoins. This is intended to discourage people from moving money out of traditional bank accounts. Platforms *could* still offer rewards for actively using their services, but paying interest on stablecoin holdings would be prohibited. This difference is significant for businesses, and Coinbase has expressed strong opposition. According to recent reports, Coinbase has informed Senate offices that it cannot support the current version of the bill due to this provision. CEO Brian Armstrong believes that overly strict limits on rewards could harm the industry more than having no regulations at all.

There was a moment of hope that a deal was close. The White House reportedly helped Senate leaders reach a preliminary agreement on wording, suggesting the long-running conflict between crypto and banking groups might finally be ending. However, that hope quickly faded because fundamental disagreements remain regarding yield rules and how to oversee decentralized finance (DeFi). These issues are significant enough to prevent the bill from moving forward for a vote. While a Senate vote is still expected sometime between May and June 2026, that timeframe is currently very uncertain.

Tether’s recent moves to get fully audited and comply with new regulations suggest the company is preparing for stricter oversight that’s now becoming a reality. The big question is whether these changes will be enough to convince those who have long doubted Tether’s transparency, and the answer will likely become clear by mid-2026.

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2026-03-27 15:52