GoKawiilTraders work on the floor at the New York Stock Exchange on the day of Circle Internet Group's initial public offering on June 5, 2025.
Stablecoin issuer Circle is tumbling after competitor Tether announced it has hired an unnamed Big Four accounting firm to audit its USDT reserves for the first time.
The shares were last down by 19%, marking the stock's worst day ever. Previously, its steepest dive was June 27, when it sunk 15.5%.
USDT is the largest stablecoin in the market with $184 billion in market cap, according to CryptoQuant. However, it has been mired in controversy for years because Tether promised transparency through quarterly "attestations" but has never provided a full, formal audit. That made many investors and regulators worried that USDT reserves were too opaque or would not meet audit standards.
Stablecoins are cryptocurrencies that peg their prices to an underlying asset, usually the U.S. dollar, and are often backed by dollar deposits, short-term U.S. Treasurys and similar cash equivalents. As they're designed to be less volatile than most cryptocurrencies, audits help ensure the stability is really there.
"The engagement of a Big Four underscores its commitment to providing deep assurance that USDT is fully backed, highly liquid, and operated with world-class risk management," the company said in a statement. "By formally engaging a Big Four audit firm, Tether is taking one of the most important steps, strengthening its position as the global leader in transparency, assurance, and regulatory readiness."
The move also dragged down Coinbase , which is the main distribution platform for USDC. Shares were last down 9%.
Circle surged in popularity last year following its successful IPO, and its USDC coin is widely viewed as more institutional grade than Tether as it undergoes full audits annually by Deloitte and also issues monthly attestations. USDC is the second largest stablecoin with a market cap of $78.6 billion.
Tether's USDT was created in 2014 to be pegged to the value of the U.S. dollar and was the only stablecoin on the market for years before U.S.-regulated alternatives like Circle's USDC cropped up. It has remained the most popular and dominant stablecoin despite controversy and regulatory scrutiny over the years.
Stablecoins including USDT have been primarily for trading and as collateral in decentralized finance (DeFi). Crypto investors watch them closely for evidence of demand, liquidity and activity in the market. In the past year, however, banks, fintech companies and other brands have been drawn to their ability to move dollars quickly and cheaply across borders.
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