JPMorgan analysts have revealed that Tether (USDT) may need to restructure its reserves to comply with proposed US stablecoin regulations. The world’s largest stablecoin issuer could face significant challenges ahead.
The Senate’s GENIUS Act and House’s STABLE Act propose strict requirements for stablecoins. These bills target issuers with over $10 billion in market cap. Both regulations demand high-quality, liquid assets as reserves.
Current Compliance Status
Tether’s current position shows concerning gaps. JPMorgan’s analysis indicates only 66% compliance under the STABLE Act. The GENIUS Act compliance stands at 83%. These numbers have declined as USDT’s supply grew.
The stablecoin giant controls 60% of the market. With a $142 billion market cap, Tether’s compliance matters. The company may need to sell various assets, including:
- Precious metals
- Bitcoin holdings
- Corporate paper
- Secured loans
- Other investments
Market Implications
This regulatory pressure could create significant market movements. Tether’s need to sell non-compliant assets might affect crypto prices. The Bitcoin market could face selling pressure if Tether liquidates its holdings.
However, Tether remains confident. The company claims over $20 billion in liquid assets. It generates $1.2 billion quarterly from US Treasuries. These resources could ease the transition.
Future Outlook
The stablecoin landscape faces transformation. Increased transparency requirements loom. Regular reserve audits may become mandatory. These changes could reshape the entire stablecoin sector.
Tether’s adaptation strategy will influence market stability. The company’s response to these regulations will set precedents. Other stablecoin issuers will likely follow suit.
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Source: CoinDesk
Tags: Tether, Stablecoins, Regulation, USDT, Compliance