IDEAS home Printed from https://ideas.repec.org/a/vrs/ecobur/v10y2024i1p57-80n7.html
   My bibliography  Save this article

The asset-backing risk of stablecoin trading: The case of Tether

Author

Listed:
  • Fernández Francisco Javier Jorcano

    (The Startup CFO. C. Orense, 12, 1º-4, 28020, Madrid, Spain)

  • Fernández Miguel Ángel Echarte

    (DEKIS Research Group, Department of Economics, Catholic University of Ávila, C. Canteros S/N, 05005, Avila, Spain)

  • Alonso Sergio Luis Náñez

    (DEKIS Research Group, Department of Economics, Catholic University of Ávila, C. Canteros S/N, 05005, Avila, Spain)

Abstract

This article aims to analyse the asset-backing risk of stablecoins, focusing on international accounting standards, classification criteria, and auditing standards and using Tether as a case study. It examines Tether’s issuance, backing, controls, ratios, and regulations to assess risk transmission and mitigation. The results suggest a need for unified and strengthened accounting and auditing standards to enhance user confidence. Liquidity, solvency, and debt ratios were applied to Tether’s balance sheets; while Tether has made efforts to increase its transparency, and although it possesses highly liquid assets, challenges remain regarding its liquidity, solvency, and debt. An independent auditors’ valuation is crucial for investor confidence, demonstrating that more specific regulations are required for stablecoins. Future research should explore other stablecoins to comprehensively understand the accounting and auditing challenges in the field.

Suggested Citation

  • Fernández Francisco Javier Jorcano & Fernández Miguel Ángel Echarte & Alonso Sergio Luis Náñez, 2024. "The asset-backing risk of stablecoin trading: The case of Tether," Economics and Business Review, Sciendo, vol. 10(1), pages 57-80, April.
    • Handle: RePEc:vrs:ecobur:v:10:y:2024:i:1:p:57-80:n:7
    DOI: 10.18559/ebr.2024.1.1211
    as

    Download full text from publisher

    File URL: https://doi.org/10.18559/ebr.2024.1.1211
    Download Restriction: no
    File URL: https://libkey.io/10.18559/ebr.2024.1.1211?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    stablecoins; auditing; IFRS; risk management; volatility; balance sheet;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vrs:ecobur:v:10:y:2024:i:1:p:57-80:n:7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.sciendo.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.