PwC Is Currently Advising a New Stablecoin Project in The Market
A division of the worldwide accounting and consulting firm PwC is currently working with a new stablecoin project that aims at developing a U.S. Dollar-based coin. The Hong Kong division will be exploring the best practices for issuing new stablecoins working with the Loopring Foundation.
The information was released on Tuesday by PwC Hong Kong. This is not the first time that PwC or a subsidiary of this company decides to work with stablecoins. In the past, PwC partnered in the United States with the platform Cred, which is developing its own stablecoin tied to the US dollar.
There are several companies that are investing in stablecoins. Circle, for example, has released its own coin pegged to the US dollar and it is known as USDC. Gemini, an important and popular virtual currency exchange in the market, has released the Gemini Dollar (GUSD).
Companies are entering the market after Tether (USDT) started to have some issues with the funds it manages. Some users and retail investors stopped trusting Tether.
William Gee, PwC’s risk assurance emerging technology leader for China and Hong Kong said about it:
“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?”
With Loopring Foundation it will be possible to help enhance transparency around the creation and management of specific stablecoins and other securities token offerings. The founder of Loopring Foundation, Daniel Wang, said that the Loopring Protocol will be playing a very important role in regtech applications.
PwC involvement in the market allows experts to ask whether it will be necessary for the space to have companies that carry audits of stablecoins in the market. According to Gee, this is an obvious step that not only the Big Four is taking. For example, PwC has been appointed as Tezos (XTZ) auditor.
Nevertheless, it might not be so easy for companies to work in an area without recognized standards or baseline regulatory approaches.
Cameron Winklevoss, in charge of the Gemini Dollar stablecoin and the Gemini exchange, said that there is no financial report framework to audit a stablecoin.
There is no financial report framework w/r/t to audit conformity w/ a stabelcoin. So you can't perform an "audit." You must instead rely on a 3rd party to attest to whether an assertion (that there is a 1:1 peg) is accurate.
— Cameron Winklevoss (@winklevoss) October 17, 2018
Gee says that in order to audit a stablecoin, issues such as AML and KYC must be addressed first. Moreover, it is not only necessary to see whether the funds to back the stablecoin are there, but it is also a key point to see and understand how the whole system works.