PricewaterhouseCoopers (PwC) has finally entered into the cryptocurrency space. The top accounting firm has finally announced its partnership with a fintech start-up that plans to launch its own US dollar-backed stablecoin.
PwC Backing New Stablecoin That Could Challenge Tether
PricewaterhouseCoopers announced on Monday, Oct. 8, that it has entered into a partnership with Cred, according to a report by Fortune. Cred is a decentralized lending start-up in the midst of developing its own dollar-backed cryptocurrency, which could challenge the more established token Tether.
With its partnership with Cred, PwC aims to use its expertise to help the fintech start-up develop “more rigorous ‘standards’ for stablecoins.” According to the accounting firm, it plans to introduce a system for Cred that “can provide 100% transparency and value substantiation.”
PwC suggested that investors are still wary of stablecoins despite the assurance that they are backed by the US dollar. One way to solve the issue and gain investor confidence is to come up with standards that allow for fully auditable stablecoin dollar reserves.
What Could Be Tether’s Problem?
With the crypto market’s volatility, stablecoins have gained popularity as investors sought more stably priced tokens. One of them is the crypto called Tether, a stablecoin that is backed by the US dollar.
Despite Tether’s popularity, doubts on whether it actually has a dollar for every token issued still remain. This prompted the company to commission a law firm to review its balances, and the results were released in June this year. While the company released the findings, it also came with a warning that the figures “should not be construed as the results of an audit.”
Just a week ago, Tether traded to as low as 95 cents on the Kraken crypto exchange before recovering. This prompted some investors to speculate that something might be wrong with the cryptocurrency. Technically, it should not trade below a dollar since every token issued has a corresponding dollar backing.
During an episode of Fortune’s “Balancing the Ledger,” BitGo CEO and founder Mike Belshe said:
“If I knew that there was a dollar in the bank for every coin, if somebody wanted to sell me a dollar for 95 cents, I would be buying them. So the fact that they’re not out there on Kraken buying those tells me that there’s something wrong with it.”