Tether has refuted claims made by JPMorgan analysts regarding its Bitcoin reserves and ability to comply with upcoming US stablecoin regulations.
In a Feb. 13 statement to CryptoSlate, the stablecoin issuer confirmed that it is closely monitoring developments around US stablecoin regulations while actively engaging with local regulators.
Tether acknowledged ongoing discussions surrounding the proposed legislation but maintained that it remains uncertain which bill, if any, will advance.
JPMorgan analysis
JPMorgan analysts suggested that if the proposed US stablecoin laws are enacted, Tether might have to liquidate some of its Bitcoin holdings to meet new regulatory requirements.
The analysts indicated that assets such as Bitcoin, precious metals, corporate paper, and secured loans could be impacted.
Two bills are currently under review in the US Congress, including the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act in the House and the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act in the Senate.
These proposals seek to tighten regulations for stablecoin issuers by introducing new licensing requirements, stricter risk management guidelines, and revised reserve backing policies.
Under the proposed rules, certain assets may no longer be eligible as reserves. JPMorgan’s evaluation suggests that Tether’s reserves meet 66% of the STABLE Act’s requirements and 83% of the GENIUS Act’s criteria.
Based on this, the analysts speculated that Tether might need to restructure its reserves to comply entirely with the regulations.
Tether responds
Tether dismissed these concerns, asserting that it holds excess assets, allowing it to adapt to changing regulations even under the most restrictive scenarios.
The company emphasized its strong financial position, stating:
“Even in the most extreme scenario, JP Morgan discounts the fact the Tether’s Group equity is over $20 billion in other very liquid assets and is generating more than $1.2 billion in profits per quarter through US Treasuries. Adapting new requirements will be straightforward.”
Tether also took a swipe at JPMorgan, suggesting that the analysts may be frustrated over the bank’s failure to acquire Bitcoin at lower prices. The firm further argued that JPMorgan does not understand Bitcoin and its USDT stablecoin properly.
Tether CEO Paolo Ardoino added on X:
“JPM analysts are salty because they don’t own Bitcoin.”
According to CryptoSlate’s data, USDT is the largest stablecoin with more than $140 billion market capitalization. According to its latest quarterly report, the firm holds 83,758 BTC (equivalent to $7.8 billion).
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