Tether Approaches $100 Billion Circulation Mark, JPMorgan Says Tether is “Mostly At Risk”

Tether Holdings Ltd., the operator of the largest stablecoin USDT, is on the verge of reaching a significant milestone – $100 billion in circulation. This achievement comes alongside record-breaking profits, solidifying Tether’s dominant position in the stablecoin market. However, this success is accompanied by growing concerns, particularly noted by JPMorgan Chase & Co., regarding regulatory compliance and transparency issues surrounding Tether.

The Regulatory Concern and Response

JPMorgan analysts, led by Nikolaos Panigirtzoglou, express unease about Tether’s growing holdings. ether is mostly at risk given its lack of regulatory compliance and transparency,” says Panigirtzoglou. 

The stablecoin market has always faced regulatory scrutiny globally. The U.S. awaits Congress’s approval of the Clarity for Payment Stablecoins Act, while Europe anticipates the implementation of the Markets in Crypto Assets (MiCA) regulation. 

Tether CEO Paolo Ardoino responds to JPMorgan’s concerns, acknowledging the bank’s recognition of Tether’s significance. The CEO emphasizes the stability and reliability of Tether, attributing its success to “financial reliability, strong reserves and its commitment.” 

Ardoino, however, cleverly counters JPMorgan’s critique, exclaiming – “But it seems to me a bit hypocritical the talk about concentration coming from JPMorgan, the biggest bank in the world.”

Strategic Moves by Tether

Beyond the regulatory challenges, Tether has been strategically fortifying its position in the crypto space. The stablecoin issuer has consistently increased its holdings, making notable Bitcoin acquisitions since September 2022. Tether’s commitment to investing up to 15% of its profits quarterly in Bitcoin underscores its proactive approach to cryptocurrency diversification.

With undisclosed Bitcoin addresses, Tether has become the 11th-largest Bitcoin holder. The stablecoin issuer has also invested significantly in Bitcoin mining facilities and provided debt financing to a prominent Bitcoin mining company. Tether’s recent $380 million investment aligns has made its holdings have a total of 66,465 Bitcoins, valued at $2.8 billion. 

In Conclusion

Tether is approaching the $100 billion circulation mark. The stability and dominance of USDT in the stablecoin market are apparent, but Tether’s strategic moves, including Bitcoin acquisitions and diversification, reflect their wise moves.