Tether may have to sell non-compliant assets — including bitcoin, precious metals, corporate paper and secured loans — to comply with proposed U.S. stablecoin regulations, according to JPMorgan analysts.
The U.S. has introduced two stablecoin bills — the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act in the House and the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act in the Senate — seeking to regulate stablecoin issuers with licensing requirements, risk management rules and 1:1 reserve backing.
Under the House's STABLE Act, only 66% of Tether's reserves are compliant, while under the Senate's GENIUS Act, 83% meet standards, JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a report on Wednesday. Notably, both figures suggest a declining compliance ratio since mid-2024 as stablecoin supply surged, the analysts said.
The STABLE Act enforces stricter reserve requirements and allows state-level regulation, while the GENIUS Act mandates federal oversight for large issuers and permits a broader range of reserve assets. If either bill passes, the analysts said Tether would need to restructure its reserves, shifting holdings into U.S. Treasuries and other liquid assets.
Tether, which controls nearly 60% of the stablecoin market, has already faced regulatory scrutiny in Europe, where the Markets in Crypto-Assets (MiCA) rules require large issuers to hold 60% of reserves in European Union banks. This led to Tether's delisting from several exchanges in Europe, though its limited market share in the region softened the impact, the analysts said.
In contrast, the U.S. market poses a much greater regulatory challenge for Tether, given the company's market share in the U.S. is more significant, according to the analysts. With both proposed bills requiring high-quality and liquid assets as reserves, the analysts said that Tether's dominant position in the U.S. could come under pressure.
"U.S. stablecoin regulations requiring more transparency and frequent reserve audits pose additional challenges to Tether," they said.
The proposed U.S. stablecoin regulations are expected to be enacted later this year.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
