JPMorgan Warns Tether May Sell Bitcoin Amid US Stablecoin Regulations
Tie the ropeJPMorgan analysts say it is the largest Stablecoin issuer and may be forced to sell some of its bitcoin holdings to comply with new U.S. regulations. The United States has proposed two laws, the Stability Act and the Genius Act, to create stricter rules for Stablecoin issuers. These laws would require Stablecoins to have reserves backed by current assets like U.S. Treasury bonds.
Regulatory pressure bracket on restraint
JPMorgan Chase’s latest report highlights concerns about Tether’s compliance with these new bills. The Stabilization Act allows state-level supervision and enforces stricter reserve rules, while the Genius Act requires federal oversight of large issuers, but provides greater flexibility in reserves.
Under the House’s stability law, only 66% of Tether reserves meet compliance standards, while the Senate’s Genius bill sets the slightly higher standard at 83%.
This decline in compliance ratio suggests that Tether’s ability to meet these requirements has been weakened due to the rapid expansion of Stablecoin supply.
If any bill becomes law, the report points out that the Forests needs to restructure their reserves and move toward more current assets, such as the U.S. Treasury.
The U.S. market poses greater challenges
Tether is already facing regulatory hurdles in Europe, where crypto assets (MICA) rules require large issuers to hold 60% of EU-based banks.
Although this has led to several European exchange talk shows, the region has limited market share in the region, hurting the impact. However, due to the dominance of forest line in the U.S. market, the U.S. has raised greater challenges.
Tethers may face more scrutiny as U.S. lawmakers push for higher transparency and frequent reserve reviews. Demand for high quality and liquid reserves may put pressure on its major markets.
Will the tether sell Bitcoin?
The tether is currently held About 83,758 bitcoins According to Bitbo, it is worth more than $8 billion as part of its reserves. In 2023, Tether announced plans to allocate 15% of its quarterly profits to the purchase of Bitcoin.
Despite strong financial situation, Reported $13 billion in profit In 2024, the reserve buffer exceeds $7 billion, and regulatory changes may force the company to liquidate a portion of its Bitcoin holdings.
If U.S. regulations require its reserves to be larger, Tether may have no choice but to adjust its asset allocation, which could impact the wider crypto market.
