JPMorgan analysts warn that Tether (USDT) may have to sell Bitcoin and other assets due to new proposed US stablecoin regulations.
Proposed Stablecoin Regulations
The US has introduced two bills aimed at increasing oversight of stablecoin issuers: the STABLE Act, focusing on state-level regulation and stricter reserve requirements, and the GENIUS Act, which proposes federal oversight of large issuers and broader reserve asset allowances.
Impact on Tether's Reserves
JPMorgan analysts led by Nikolaos Panigirtzoglou estimate that under these proposals, only 66% of Tether’s reserves would comply with STABLE Act requirements, while 83% would meet GENIUS Act standards. If both bills become law, Tether would need to restructure its reserves by shifting more funds into US Treasuries and other liquid assets.
Consequences for the Stablecoin Market
These potential laws could put pressure on Tether’s dominant position by mandating high-quality, liquid reserves and requiring enhanced transparency and frequent audits. In light of the European MiCA regulations, such measures could compound challenges for Tether in the US market.
Regulatory initiatives in the US may significantly impact the stablecoin market, particularly large companies like Tether, as they may need to adapt and realign their reserves to meet new standards.
