How Can an Independent Audit Mitigate the Risk of Centralized Stablecoin Reserves?

An independent audit, conducted by a reputable accounting firm, provides verification that the stablecoin issuer actually holds the reserves they claim to have in their bank accounts. While not eliminating all counterparty risk, regular and transparent audits increase public trust and provide a check against fraudulent claims or mismanagement, offering a degree of reassurance to token holders.