Tether CEO Ardoino Dismisses J.P. Morgan's Claim That the Company May Have to Sell Its Bitcoin (BTC) Holdings to Comply with Proposed U.S. Stablecoin Regulations

A report published on February 12 by a team of analysts, led by J.P. Morgan strategist Nikolaos Panigirtzoglou, suggested that proposed U.S. stablecoin regulations could force Tether to liquidate part of its BTC reserves.

Paolo Ardoino, the CEO of Tether, has hit back at J.P. Morgan’s claim that the stablecoin company may be forced to sell its Bitcoin (BTC) holdings to comply with upcoming U.S. stablecoin regulations, potentially causing a major downturn in BTC prices.

In a report published on February 12, a team of analysts led by J.P. Morgan strategist Nikolaos Panigirtzoglou suggested that the proposed U.S. stablecoin regulations could push Tether to liquidate part of its BTC reserves.

However, Ardoino quickly dismissed these claims. “JPM analysts are salty because they don’t own Bitcoin,” the CEO wrote in an X post.

The J.P. Morgan report stated that upcoming U.S. stablecoin regulations might require the stablecoin issuer to dispose of non-compliant assets, including Bitcoin, precious metals, corporate paper, and secured loans.

Considering that Tether’s Bitcoin reserves amount to around 83,758 BTC, valued at over $8 billion, a large-scale sale could significantly impact the cryptocurrency market.

In a separate X post, Ardoino accused J.P. Morgan of failing to acknowledge Tether’s strong financial position, highlighting that the company holds over $20 billion in highly liquid assets beyond its stablecoin reserves. He also noted that Tether generates more than $1.2 billion in quarterly profits from U.S. Treasuries alone, excluding earnings from other investments and operations.

“Tether has probably the best risk management in the industry. JPM is just salty because they’re missing the Bitcoin train,” Ardoino wrote.

On February 4, Senator Bill Hagerty (R-TN) introduced the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, a bill that aims to establish a federal oversight framework for stablecoins and their issuers.

Co-sponsored by Senate Banking Committee Chairman Tim Scott (R-SC), and Senators Kristen Gillibrand (D-NY) and Cynthia Lummis (R-WY), the bill seeks to create licensing requirements and regulatory guidelines to govern the rapidly growing sector of digital assets.

In a separate development, House Financial Service Committee Chairman French Hill (R-AR) and Representative Bryan Steil (R-WI) introduced a discussion draft for stablecoin regulation on February 6. The proposed legislation, titled the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act, aims to establish clearer oversight and regulatory standards for the industry.

The proposed STABLE Act is said to align closely with the GENIUS Act, serving as a complementary legislative effort within the House of Representatives to create a regulatory framework for stablecoins.

Tether is also facing regulatory challenges outside the U.S., with European authorities imposing new requirements under the Markets in Crypto-Assets (MiCA) regulation. The policy mandates that major stablecoin issuers maintain 60% of their reserves in banks based within the European Union, adding further pressure to the company’s operations.

These regulatory pressures have led to Tether being delisted from several European exchanges. However, the stablecoin issuer faces even greater challenges in the U.S., where it holds a dominant position in the market.

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Michaela has no crypto positions and does not hold any crypto assets.