Tether, the world’s top stablecoin issuer, could soon face pressure to sell billions in Bitcoin and other assets to comply with stricter U.S. stablecoin regulations, according to a recent JPMorgan analysis.
Tether currently holds around 83,758 Bitcoin, valued at over $8 billion, along with other investments such as precious metals, corporate debt, and collateralized loans. However, under the proposed US regulatory framework, certain assets may no longer qualify as valid reserves.
Upcoming US Stablecoin Bills Could Reshape the Industry
Two separate bills aim to establish clearer regulatory standards for stablecoin issuers:
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The STABLE Act (introduced in the House) requires 1:1 reserve support, stronger risk management, and state-level oversight.
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The GENIUS Act (proposed in the Senate) also imposes fully backed reserves, but allows for a broader mix of approved assets while introducing federal regulations for major players.
JPMorgan’s analysis found that under these rules, only 66% of current Tether reserves would comply with the STABLE Act, while 83% would align with the GENIUS Act. The report also noted that Tether’s compliance rate has declined since mid-2024, a period that coincided with a sharp increase in stablecoin issuance.
Tether also faces European regulatory hurdles
Tether is also navigating new rules in Europe, where the Markets in Crypto Assets (MiCA) framework requires large stablecoin issuers to hold at least 60% of their reserves in European banks.
This has already led to Tether’s USDT being delisted from multiple European exchanges. However, since Tether’s presence in Europe is relatively small, the overall impact has been limited. The real challenge lies in the United States, where regulatory changes could significantly reshape the company’s operations.
Tether’s financial strength remains strong
Despite increasing regulatory scrutiny, Tether’s latest financial statements show a company in a strong position:
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Q4 2024 Net Profit: Over $13 Billion
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Total assets: more than 20 billion dollars
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US Treasury Holdings: $113 billion (nearly 80% of its reserves)
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Reserve reserve: more than 7 billion dollars
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Unrealized gains from Bitcoin and gold holdings: around $5 billion
Tether has also become one of the largest buyers of US government debt, further consolidating its financial position.
How will Tether adapt if regulations are approved?
If any of the US bills become law, Tether will need to shift more reserves into US Treasuries and other highly liquid assets to comply.
Analysts believe that required transparency, regular audits, and stricter reserve management rules could present significant adjustments for Tether.
Tether CEO stands firm
Despite these potential obstacles, Tether CEO Paolo Ardoino remains optimistic. He highlighted the company’s strong liquidity, its huge US Treasury holdings and a record $45 billion increase in token issuance in 2024 as proof of its resilience.
With US stablecoin regulations expected to end later this year, the cryptocurrency world is closely watching how Tether will restructure its reserves to maintain its dominant position.
Also read: Judge Halts SEC Lawsuit Against Binance for 60 Days While Crypto Regulations Are Reviewed