JPMorgan: Tether's Dominance Could Threaten Cryptocurrency Market

According to Bloomberg, stablecoin operator Tether Holdings Ltd. is expanding its dominant market share after achieving record profits. JPMorgan Chase Co. says this poses a risk to the overall cryptocurrency market. A report released by JPMorgan on Thursday showed that over the past two years, the centralization of USDT has been increasing, consolidating its position as a leading stablecoin, but Tether's "lack of regulatory compliance and transparency" brings increasing risks to the market.

 

JPMorgan analysts wrote: "Stablecoin issuers who are more in line with existing regulations may benefit from upcoming crackdowns on stablecoins and gain market share." Since paying a $41 million fine to CFTC for misrepresenting reserves in 2021, Tether has been striving to make its operations and finances more transparent through quarterly attestations. Nevertheless, the report states that Tether's stablecoin still lags behind competitor Circle in terms of regulatory compliance with USDC tokens. Stablecoins could soon face stricter regulation in both the United States and Europe. While the Stablecoin Payment Act awaits voting in U.S House of Representatives, EU crypto asset markets supervision (MiCA) is expected to be partially implemented this June.

 

Tether CEO Paolo Ardoino said in a statement: "Tether's dominance might be 'negative' for competitors hoping for similar success including those within banking industry but it has never been negative for markets that need us most . We have always worked closely with global regulators providing them education about technology and guidance on how they should think about this issue."