Paolo Ardoino, CEO of Tether, has criticized J.P. Morgan’s claim that the company may have to sell its Bitcoin (BTC) holdings to comply with proposed U.S. stablecoin regulations, potentially triggering a massive downturn in BTC prices.
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.
However, Ardoino swiftly dismissed these assertions. “JPM analysts are salty because they don’t own Bitcoin,” the CEO stated in a post to X.
The recent report from J.P. Morgan suggested that upcoming U.S. stablecoin regulations might require the stablecoin issuer to offload non-compliant assets, such as Bitcoin, precious metals, corporate paper, and secured loans.
With Tether’s Bitcoin reserves totaling around 83,758 BTC, valued at over $8 billion, a large-scale sale could have a substantial effect on the cryptocurrency market.
In a separate X post, Ardoino argued that J.P. Morgan overlooked Tether’s strong financial position, noting that beyond its stablecoin reserves, the company holds over $20 billion in highly liquid assets. He also highlighted 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.
Proposed Stablecoin Bills
On February 4, Senator Bill Hagerty, a Republican from Tennessee, introduced the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, a legislative proposal aimed at creating a federal oversight framework for stablecoins and their issuers.
Co-sponsored by Senate Banking Committee Chairman Tim Scott, and Senator Kristen Gillibrand and Cynthia Lummis, the bill seeks to establish licensing requirements and regulatory guidelines to govern the rapidly growing sector of digital assets.
In a separate move, House Financial Service Committee Chairman French Hill and Representative Bryan Steil introduced a discussion draft for stablecoin regulation on February 6. The proposed legislation, known as 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 closely align with the GENIUS Act, serving as a complementary legislative effort within the House of Representatives to establish a regulatory framework for stablecoins.
Tether is facing regulatory challenges beyond the U.S., as European authorities impose 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.
Regulatory pressures have resulted in Tether being delisted from multiple European exchanges. However, the stablecoin issuer faces even greater challenges in the U.S., where it holds a dominant position in the market.
Read More
Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
Post Views: 8
