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Tether could face hurdles if proposed U.S. stablecoin regulations take effect, possibly requiring it to sell off parts of its reserves to comply with new rules, according to a JPMorgan research report.
The Senate’s GENIUS Act proposes federal oversight for stablecoins with a market cap exceeding $10 billion, while the House’s STABLE Act suggests state-level regulation. Both bills propose stricter reserve requirements, allowing only highly liquid assets like insured deposits, U.S. Treasuries, and central bank reserves. The Senate version also includes money market funds and reverse repos.
With a 60% market share and a $142 billion market cap, Tether dominates the stablecoin market. However, JPMorgan analysts estimate that only 66% of its reserves comply with the STABLE Act and 83% with the GENIUS Act, pointing to a declining compliance ratio as USDT supply has surged.
If the regulations move forward, Tether would need to swap non-compliant assets—such as Bitcoin, corporate paper, secured loans, and precious metals—for approved reserves like Treasury bills.
Tether acknowledged monitoring the situation and engaging with regulators but said the outcome remains uncertain. A spokesperson downplayed concerns, highlighting the company’s $20 billion in liquid assets and $1.2 billion in quarterly profits from U.S. Treasuries, calling any necessary adjustments “straightforward.”
Tether CEO Paolo Ardoino reacted to the report on X, taking a swipe at JPMorgan analysts, saying they are “salty because they don’t own Bitcoin.”
Ardoino took another jab at JPMorgan analysts, saying they were likely jealous they didn’t buy Bitcoin early. “Clearly, they don’t understand either Bitcoin nor Tether. And they won’t get a cheap opportunity to buy Bitcoin now. No one feels sorry for them,” he said.
Beyond reserve adjustments, the proposed laws also push for greater transparency and frequent reserve audits, which could pose additional challenges for Tether and other stablecoin issuers.
Tether holds about 83,758 BTC, valued at over $8 billion, and has been allocating up to 15% of its quarterly profits to Bitcoin purchases since 2023.
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