The stablecoin attestation report plays a key role in ensuring transparency and trust in the digital asset by confirming the availability of sufficient reserves to cover the issued tokens. Understanding this report helps users, exchanges, and regulators assess the stability and reliability of the stablecoin, as well as reduce financial risks.
What is the stablecoin attestation report?
The stablecoin attestation report is a document that confirms the availability of sufficient reserves to back all tokens in circulation. It is prepared by an independent auditing firm to ensure transparency and trust in the issuer. The report indicates the total number of tokens, the structure of reserves (e.g., cash or government bonds), confirms 1:1 compliance, and also states the date of verification and the auditor's conclusion.
Attestation is a basic verification of the reliability of the provided data, while an audit is a deeper financial analysis. Such reports are needed to ensure the confidence of users, exchanges, and regulators that the stablecoin is actually backed by real assets, and to prevent situations similar to the collapse of TerraUSD. For example, the company Circle (issuer of USDC) regularly publishes reports with the structure of its reserves.
Comparison of report and audit
Attestation and audit are different levels of verification of financial information that are often confused, especially in the context of stablecoins.
Attestation is a basic verification when an independent firm confirms that the information provided by the issuer (for example, about reserves) is true as of a certain date. The data is mainly provided by the issuer itself, and the verification is limited.
An audit is a deep investigation of financial statements that includes verifying accounting records, sources of assets, control procedures, fraud risks, etc.
Thus, attestation is a faster and less in-depth way of confirming financial information, while an audit provides a higher level of trust due to detailed analysis, but requires more time and resources.
The goal of the attestation report
The goal of the stablecoin attestation report is to confirm that the tokens are fully backed by real reserves at the time of verification. This increases transparency in the issuer's activities and fosters trust in the stablecoin.
The main objectives of the report:
1:1 backing confirmation and financial transparency: prove that each token has a corresponding reserve asset and provide users and the market with a clear understanding of the state of reserves.
Strengthening trust and reducing market risks: demonstrate the good faith of the issuer, prevent panic, loss of trust, or loss of peg to fiat currency.
Meeting regulatory requirements and preparing for an audit: ensuring compliance with financial reporting and serving as the first step for a full audit.
Such a report serves as an instrument of financial accountability and a minimum standard of transparency in the field of stablecoins.
Who conducts the attestation and its criteria
Stablecoin attestation is usually conducted by an independent auditing or accounting firm that has the appropriate qualifications and experience in verifying financial information. These can be large international companies (e.g., PwC, Deloitte, KPMG, EY) or specialized local auditing firms.
The main criteria for attestation:
Independence of the auditor and adherence to cryptocurrency standards: the auditing firm should not have a conflict of interest with the issuer and must operate according to international or national standards of attestation and audit.
Verification of compliance and structure of reserves: confirmation that the total amount of reserve assets corresponds to the number of issued tokens, with an assessment of liquidity and quality of assets (cash, bonds, deposits, etc.).
Time binding and documentary support: the report must contain information about the date of verification, and the auditor must have access to documents (bank statements, contracts, reports).
Thus, attestation provides an objective verification of the data claimed by the issuer regarding the backing of the stablecoin.
How to read the attestation report and why it is important to understand?
It is important to read the stablecoin attestation report carefully to assess the actual backing of the tokens and understand the level of risks. Here’s what to pay attention to:
Report date: reserves may change, so it is important to know at what moment the verification was conducted.
Total number of tokens in circulation: how many tokens are active at the time of the report.
Structure of reserves: what specific assets back the stablecoin (cash, bonds, deposits). Assets should be liquid and reliable.
1:1 compliance: are there enough reserves to cover all tokens in circulation?
Auditor's conclusion: does it confirm the reliability of the information?
Understanding the report helps assess the risks of losing the stablecoin's peg to fiat currency, avoid fraud, and make informed decisions about using or investing in this token. It also enhances financial transparency and trust among users, exchanges, and regulators.
Example of the report
A simplified example of a stablecoin attestation report may look like this:
Attestation report of the reserves of stablecoin XYZ Date of verification: May 31, 2025
Total number of tokens in circulation: 100 million XYZ
Total value of reserves: $100 million
Structure of reserves:
Cash in bank accounts: $60 million (60%)
Short-term government bonds: $35 million (35%)
Other liquid assets: $5 million (5%)
Auditor's conclusion: We confirm that as of May 31, 2025, the total value of the reserve assets of company XYZ fully covers the number of issued XYZ tokens in circulation.
This format is typical for reports published by issuers of popular stablecoins (e.g., USDC from Circle).
How are the reserves of the stablecoin verified?
The reserves of the stablecoin are verified by obtaining and analyzing documentation such as bank statements, contracts, and asset reports — cash, deposits, bonds, etc. The auditor then compares the total value of reserves with the number of tokens in circulation to confirm their 1:1 compliance. The liquidity of the assets is also assessed, i.e., how quickly they can be converted into cash without significant losses. It is important to verify the authenticity of the provided documents and exclude the possibility of forgery.
In addition, sometimes internal accounting and reserve control procedures in the issuing company are examined. Based on all the collected information, an official conclusion is formed — an attestation report. This process guarantees that the stablecoin is indeed backed by assets and maintains price stability.
What will happen if reserves do not match the supply?
If reserves do not match the number of tokens in circulation, it means that the stablecoin is not fully backed by real assets. In this case, serious problems may arise. First, this may lead to a loss of trust among users and exchanges, causing many to start selling tokens en masse, resulting in a drop in their value and a loss of stability in the peg to fiat currency.
Secondly, a lack of reserves can lead to legal consequences for the issuer, including fines or lawsuits from regulators. Finally, it increases the risk of financial collapse of the stablecoin, as happened, for example, with TerraUSD (UST) when the token lost its peg due to insufficient reserves. Therefore, it is very important that the reserves always match the number of issued tokens.
Conclusions
The stablecoin attestation report confirms that all tokens are backed by real reserves, which increases transparency and trust among users and regulators. Understanding such a report helps make informed decisions about using or investing in the stablecoin and supports price stability.