Tether Rejects JPMorgan's Claims It Will Be Forced to Sell Bitcoin Reserves to Comply With Proposed US Stablecoin Regulations

Tether has firmly responded to JPMorgan analysts who suggested the company might be forced to sell part of its Bitcoin reserves to comply with proposed US stablecoin regulations.

Tether has hit back at JPMorgan analysts who claimed the stablecoin issuer may have to sell some of its Bitcoin reserves to comply with proposed US stablecoin regulations.

On February 12, a team of analysts led by Nikolaos Panigirtzoglou released a report stating that, under the proposed laws, Tether could need to offload some non-compliant assets, such as Bitcoin, to meet regulatory requirements.

The report is based on the currently discussed bills, the GENIUS Act and the STABLE Act, which establish stricter regulations on stablecoins. According to the JPMorgan analysts, the STABLE Act, in particular, requires stablecoin issuers to hold reserves only in assets considered safe, such as US Treasury bonds or short-term repos. This would imply the sale of assets like Bitcoin to meet the standards of the new legislation.

Paolo Ardoino: JPMorgan Doesn’t Understand Bitcoin

However, Tether has slammed the claims, with a company spokesperson stating that the analysts do not understand either Bitcoin or the company structure, especially considering the laws are not yet finalized. Moreover, the firm highlighted that it is closely monitoring the evolution of the regulations and maintaining an active dialogue with local regulators to ensure its operations comply with the regulations.

Tether Boasts of Financial Strength

In addition, the spokesperson noted that Tether's financial strength is evident, as the company holds over $20 billion in liquid assets, along with more than $1.2 billion in quarterly profits through US Treasury bonds. This strength would enable the company to adapt to any regulatory changes, even in the worst-case scenario, according to the spokesperson.

The debate over the proposed stablecoin regulations continues to be a hot topic in the crypto world. While the laws have not yet been approved, their potential impact on companies in the sector could alter the functioning of the crypto industry in the coming years.