Taking forward its initiative with the not for profit organisation, Loopring Foundation, the Global accounting and consulting organization, PwC’s Hong Kong arm is now exploring the best practises for the purpose of the issuance of stablecoins. This news was announced on November 6, 2018. This Asia-focused study comes after PwC’s partnership the United States which allows the firm to advise on Blockchain-based, decentralized lending platform called Cred. Cred is currently working on a US Dollar based stablecoin.
In the prevailing crypto markets, stablecoins have become all the rage. We have in the past seen Circle, the peer-to-peer payments technology company, issue its dollar-based USDC on Coinbase. In fact, even the tech giant, IBM, is joining the league. That’s not all, the craze for price stable stablecoins is also running parallel with the meltdown involving Tether, which is the issuer of the USDT coin. Tether has been haunted with speculations about its dollar reserves.
PwC’s risk assurance Emerging Tech Leader for Hong Kong and China, William Gee was quoted as saying:
“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?”
The not for profit, Loopring Foundation, which develops Blockchain-based decentralized exchange protocols, has mentioned that PwC’s collaboration in the project will facilitate the organisation’s drive for transparency which revolves around the development as well as management of security token offerings and stablecoins.
Daniel Wang, the Founder of Loopring Foundation, elaborated:
“The level of security and auditability empowered by the Loopring Protocol will play an essential role in regtech applications.”
William Gee has said that for stablecoins to be audited, a lot of things need to be addressed, such as the compliance with anti money laundering (AML) and know your customer (KYC) regulations. Another core foundation is the management of the issuance and redemption cycle of the stablecoin as well the controls and mechanisms. Next come, safekeeping and custody tech. Gee concluded saying:
“It’s not just looking at the $10 million or $10 billion in your accounts. It involves looking at the entire operation: the entry and exit and all the controls surrounding them.”