- Tether has said that complying with U.S. regulations around stablecoins will be “straightforward”
- The USDT issuer acknowledged the potential need to adjust its reserve assets to align with proposed U.S. stablecoin regulations
- JPMorgan states that only 66% to 83% of Tether’s reserves meet the criteria set by forthcoming U.S. legislation
Tether has said that complying with forthcoming U.S. stablecoin regulations will be “straightforward” after JPMorgan said that the company currently doesn’t meet the requirements. In a recent report, the bank said that Tether’s reserves are only 66% compliant under the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act and 83% compliant under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. This may require Tether to divest itself of these non-compliant assets, although the company has dismissed these concerns, saying that it is well on the way towards compliance.
Two-Act Drama Could Cause Problems
The U.S. is considering new legislation to regulate stablecoins, focusing on ensuring that issuers maintain high-quality and liquid assets as reserves. On February 6, 2025, House Financial Services Committee Chairman French Hill (R-AR) and Representative Bryan Steil (R-WI) released a discussion draft of the STABLE Act in the House of Representatives. This came two days after Senator Bill Hagerty (R-TN) introduced the GENIUS Act.
Following the introduction of these acts, analysts from JPMorgan have assessed Tether’s current reserve holdings and suggest that they are only 66% compliant with the STABLE Act and 83% compliant with the GENIUS Act. The bank also claims that these figures suggest a declining compliance ratio since the middle of last year, despite a 30 billion surge in supply. Under the proposed regulations, Tether would have to replace non-compliant assets with compliant ones, such as T-bills.
Tether Unconcerned by New Rules
In an email to Coindesk, Tether stated that it is monitoring the two bills but that it is too early to suggest that it is in trouble:
Tether is closely monitoring the evolution of the different U.S. stablecoin bills and also actively engaging with local regulators. Consultation from the industry needs to happen and it’s still unclear which bill will move forward. Even in the most extreme scenario, JPMorgan discounts the fact the Tether’s Group equity is over $20 billion in other very liquid assets and is generating more than $1.2 billion in profits per quarter through U.S. Treasuries. Adapting new requirements will be straightforward.
As the regulatory environment for stablecoins in the U.S. continues to develop, Tether’s proactive stance suggests a commitment to maintaining its role as a leading stablecoin issuer while adhering to new compliance standards, something that critics have long been predicting will usher in its downfall.
