Tether Faces Potential Bitcoin Sell-Off Amid Proposed U.S. Regulations
JPMorgan analysts warn that Tether (USDT) may be forced to sell some of its $8 billion worth of Bitcoin and other non-compliant assets if proposed U.S. stablecoin regulations take effect.
Proposed Stablecoin Bills: STABLE Act & GENIUS Act
The STABLE Act (House Bill) and the GENIUS Act (Senate Bill) propose stricter transparency, reserve requirements, and oversight for stablecoin issuers. According to JPMorgan's analysis:
Key Highlights:
- Only 66% of Tether’s reserves comply with the STABLE Act.
- 83% of Tether’s reserves meet the GENIUS Act requirements.
Tether’s non-compliant assets include:
Key Highlights:
- Bitcoin (83,758 BTC worth ~$8B)
- Precious metals
- Corporate paper and secured loans
Regulatory Pressure on Tether
Key Highlights:
- U.S. Regulations: May require Tether to shift reserves into U.S. Treasuries and high-quality liquid assets.
- European MiCA Rules: Already led to USDT delistings due to EU banking reserve requirements.
- Tether’s Market Share: Holding nearly 60% of the stablecoin market, Tether faces increasing scrutiny and competition from Circle (USDC) and other regulated stablecoins.
With stablecoin legislation expected later this year, the industry is watching to see whether Tether will adjust its reserves or risk losing market dominance in the U.S.
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