Circle has announced that it has sought out the services of Grant Thornton LLP, an independent accounting company, to ascertain that there are enough fiat reserves to back USDC. This verification the firm has said will be done through attestation reports that will be carried out on a monthly basis.
The Extent Of The Assessment
Going by the findings of the accounting firm, Circle currently has over $4000 above the tokens it has already issued in tokens in its dollar reserves. The report shows that as at the 31st of October there were 127,408,827 issued USDC tokens. As at the same date, there was $127,412,240.89 in Circle’s custody accounts.
The accounting firm has stated that the review has been conducted in line with the current accounting standards. The report states that the examination was carried out in accordance with the attestation standards put in place by the American Institute of Certified Public Accountants.
It goes further to explain that the standards dictate that examinations should be planned and performed in a way that leads to the obtaining of reasonable assurance. This is with regards to whether the information contained within the Reserve Account Report tallies with, and is based on, the criteria established within the Reserve Account Report entirely.
According to the released report, an examination follows a set procedure in order to come up with evidence based on the Reserve Account Report. The firm notes that the accounting firm reserves the right to choose the nature of the assessments, their timing and the extent to which they will be performed. This includes the assessment of the possibility of misstatements being contained within the Reserve Account report whether it be through fraud or error.
Examination On The Possibility Of Misstatement Carried Out
The report goes on further to state that while assessing the possibility of a misstatement being made in the report, it goes through the internal control that is used in preparing the Reserve Account Report. This, it stated, is done to facilitate the design of appropriate procedures, not for the purpose of deducing an opinion on how effective the internal control is, but for application of the circumstance.
The accounting firm has concluded that the information provided by Circle has been indeed factual. It stated that the Reserve Account Information submitted within the Reserve Account Report as at the 31st of October is correct in all material respects with regards to the criteria established within the Reserve Account Report.
Apart from USDC, some of the firms that conduct regular attestation reports include Paxos standard, and Gemini Dollar.
New Industry Standard Set
Assessments conducted by third-party accounting firms are very important in the sector as they assure investors that the stablecoins they are holding are indeed worth what they should be worth. In the event that the contrary is the case, the accounting firms will be the first to blow the whistle.
This is a sign of stability as the stablecoins are seen as setting a standard when it comes to integrity.