Tether Pushes Back Against JPMorgan Analysts’ Bitcoin Sale Claims

Tether, the issuer of the USDt stablecoin, has rejected claims from JPMorgan analysts suggesting it may need to sell Bitcoin to comply with potential U.S. stablecoin regulations.

A February 12th report led by JPMorgan strategist Nikolaos Panigirtzoglou suggested that proposed U.S. laws could require Tether to adjust its reserves, potentially selling some of its Bitcoin holdings.

Proposed U.S. Stablecoin Regulations

Two legislative proposals are currently under discussion:

• GENIUS Act (February 4th) – Introduced by Senator Bill Hagerty, co-sponsored by Senate Banking Committee Chairman Tim Scott, Senators Kirsten Gillibrand, and Cynthia Lummis, it seeks to create a federal framework for stablecoin issuers.
• STABLE Act (February 6th) – Introduced by House Financial Services Committee Chairman French Hill and Representative Bryan Steil, it serves as a counterpart to the GENIUS Act.

Reserve Requirements and Impact on Tether

JPMorgan analysts noted that the STABLE Act proposes stricter reserve requirements, limiting stablecoin issuers to insured deposits, U.S. Treasury bills, short-term Treasury repos, and central bank reserves. 

The GENIUS Act allows additional reserve assets such as money market funds and reverse repos.

The JPMorgan report stated that Tether’s reserves are 66% compliant under the STABLE Act and 83% under the GENIUS Act, meaning adjustments would be necessary under the proposed rules.

Tether’s Response

Tether CEO Paolo Ardoino responded to JPMorgan analysts’ claims with a mix of criticism and confidence in Tether’s financial position. 

In a series of posts on X, Ardoino suggested that JPMorgan analysts are frustrated about not holding enough Bitcoin.

Addressing the broader regulatory concerns, Ardoino emphasized that stablecoin legislation is still under discussion and that many details remain to be defined in upcoming consultations. 

He reassured that even in a worst-case scenario, Tether’s group equity exceeds $20 billion in highly liquid assets and generates over $1.2 billion in quarterly profits from U.S. Treasuries, excluding other investments and activities.

He concluded by asserting that Tether has one of the best risk management strategies in the industry and reiterated that JPMorgan’s stance may stem from “missing the Bitcoin train.”