JPMorgan warns that Tether's reserves may not fully comply with proposed stablecoin regulations in the US, potentially requiring asset sales to meet requirements.
JPMorgan (JPM) warned that Tether , the issuer of the largest stablecoin USDT, could face difficulties complying with proposed U.S. stablecoin regulations. In a research report released on Wednesday, JPMorgan stated that company data indicates Tether 's reserves are only 66% compliant with the STABLE Act and 83% compliant with the GENIUS Act.
The report highlighted that the STABLE Act, passed by the House of Representatives, mandates federal regulation for stablecoins exceeding a market capitalization of $10 billion, with potential for state regulation if it aligns with federal guidelines. The Senate's GENIUS Act proposes similar regulations. Both bills aim to enhance transparency and investor protection within the stablecoin market.JPMorgan analysts noted that Tether's dominance in the stablecoin space, with a 60% market share and a market cap of approximately $142 billion, makes it particularly susceptible to these regulations. They predict that Tether might need to sell off some of its current reserves, consisting of assets like precious metals, Bitcoin, corporate paper, secured loans, and other investments, to meet the new requirements. These assets would be replaced with more compliant ones, such as U.S. Treasury bills. Tether, however, maintains that it is actively engaged with regulators and closely monitoring the development of these bills. They emphasize their strong financial position, with over $20 billion in liquid assets and quarterly profits exceeding $1.2 billion from U.S. Treasuries, suggesting they are well-equipped to adapt to the new regulations
Stablecoin Tether US Regulation STABLE Act GENIUS Act Jpmorgan Bitcoin
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