JPMorgan: Tether's Dominance in the Market May Threaten Cryptocurrency

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

JPMorgan analysts wrote, "Stablecoin issuers that are more compliant with existing regulations may benefit from the upcoming regulatory crackdown on stablecoins and gain market share." Since paying a $41 million fine to the CFTC in 2021 for misreporting reserves, Tether has been working to make its operations and finances more transparent through quarterly attestations. Nevertheless, the report stated that Tether's stablecoin still lags behind its competitor Circle in terms of regulatory compliance for USDC tokens. Stablecoins may soon face stricter regulations in the U.S. and Europe. While the payment stablecoin bill is awaiting a vote in the U.S. House of Representatives, the EU's Markets in Crypto-Assets (MiCA) regulation is expected to be partially implemented this June.

Tether CEO Paolo Ardoino stated in a statement, "Tether's market dominance may be 'negative' for competitors, including those in the banking sector, who wish to achieve similar success, but it has never been negative for the market that needs us the most. We have been working closely with global regulators to educate them about the technology and provide guidance on how they should think about it."