Big-four auditing giant and accounting firm PricewaterhouseCoopers (PwC) is forming a joint business relationship with Cred, a decentralized lending startup. In the official announcement on Monday, October 8, PwC said that it will be providing financial expertise to Cred and help it launch its new USD-pegged stablecoin.
PwC said that its new service will help to overcome the existing issues of stablecoins in the market. PwC noted that the new stablecoin by Cred will “provide 100% transparency and value substantiation”. It also noted that its partnership with Cred will provide a big boost to the U.S.-Dollar-pegged cryptocurrency market. Furthermore, it will also help to establish more trust among investors.
Additionally, PwC also noted that it will bring valuable insights into risk management, security, governance, and other things. This will help to shape the future of the stablecoin ecosystem as well as other associated industry practices. Grainne McNamara, US Blockchain and Cryptocurrency Leader, PwC, said:
“We are excited to work with Cred to help increase industry awareness regarding how the asset backed digital token ecosystem can be secured and scaled on behalf of participants along the digital asset value chain. We are eager to leverage our proven industry experience to support a quickly developing asset class and its associated market infrastructure components. We believe this exploration of the blockchain infrastructure and associated operational frameworks can help the industry develop an increased level of comfort.”
Growing Demand for Audited/Regulated Stablecoins
Recently, there has been a growing demand for regulated stablecoins after popular and existing projects like Tether have repeatedly failed to submit the audit of its reserves. Tether has also been charged with wrongly inflating the Bitcoin price by pumping its stablecoins in the crypto market, without actually backing them with physical USD.
This has led to an atmosphere of mistrust and panic in the crypto space with investors preferring to stay away from it. Established players like PwC, IBM and others are working towards getting the credibility of stablecoins. Dan Schatt, Cred co-founder and President, said:
“PwC’s commitment to the crypto community at large sends a very strong message to retail investors, mainstream financial services providers and the crypto enthusiasts that the world is moving toward decentralization, transparency and accountability in a system that will evolve beyond the need for trusted intermediaries. This will help the ecosystem evaluate key considerations as standards are enhanced relative to the creation and management of stablecoins and universal digital assets that support mass adoption of crypto assets.”
Over the last one month, a number of stablecoin projects are launched in the crypto market. Popular cryptocurrency exchange Gemini launched its regulated stablecoin Gemini Dollar pegged to the USD in 1:1 ratio. At the same time, another regulated Paxos Standard Stablecoin was also announced. Both the stablecoins are approved and regulated by the New York Department of Financial Services (NYDFS).
The NYDFS said that both the tokens would be subjected to “effective risk-based controls and appropriate BSA/AML and OFAC controls to prevent the Gemini Dollar or Paxos Standard Token from being used in connection with money laundering or terrorist financing.”