In its latest report, JPMorgan argued that Tether, unlike its rival Circle, lacks sufficient regulatory transparency. Tether CEO expressed his opinions about these claims. He also said market dominance is a negative for competitors like JPMorgan. Meanwhile, USDT issuer Tether’s net profit is currently 10% of JPMorgan’s earnings.
Tether CEO responded to the JPMorgan report!
Alongside its record-breaking profits, stablecoin giant Tether has also been expanding its footprint in the market lately. cryptokoin.com As we reported earlier this week, Tether minted another $1 billion while adding $13 billion to its market value in the past four months alone. However, banking giant JPMorgan has expressed concerns, stating that this rapid expansion and dominance could be a major risk to the broader crypto market. He also mentioned the lack of regulatory transparency regarding Tether.
However, Tether executive Paolo Ardoino was quick to respond, saying market dominance was a ‘negative’ for JPMorgan, which competes with them in the stablecoin space. Commenting on JPMorgan’s report, Ardoino said:
Tether’s market dominance could be a ‘negative’ for rivals, including those in the banking sector, seeking similar success. But it was never negative for the markets that needed us most. We have always worked closely with global regulators to educate them about the technology and provide guidance on how to think about it.
JPMorgan: Tether’s marketing dominance is a worrying sign
Interestingly, the latest report also shows that Tether’s net profit rose to 10% of JPMorgan’s earnings. In the past year, Tether’s market value has increased by 35%. The company added $4 billion in the last month of January alone. One of the key reasons behind this is that Tether’s closest rival, Circle (USDC), is losing market share due to regulatory pressures. USDT is on the verge of surpassing $100 billion in circulation, a major milestone for the company.
JPMorgan noted that Tether’s “lack of regulatory compliance and transparency” poses an increasing risk to the overall cryptocurrency market. Regulatory scrutiny for stablecoins is on the horizon in both the US and Europe. The Clarity for Payment Stablecoin Act is currently awaiting a vote in the US House of Representatives. Additionally, a partial implementation of the European Union’s CryptoAssets Directive (MiCA) is expected in June this year. JPMorgan wrote:
Stablecoin issuers that are more compliant with existing regulations are likely to benefit from future regulatory pressure on stablecoins and gain market share.
USDT and USDC competition
Tether has taken steps to increase transparency in its operations and finances following a $41 million fine paid to the CFTC in 2021 for misinformation about its reserves. Despite these efforts, the JPMorgan report shows it still lags behind rival Circle in regulatory compliance. USDT is currently nearly four times the size of the USDC stablecoin. Moreover, both of them are on the top ten crypto list.
To be informed about the latest developments, follow us twitter‘in, Facebookin and InstagramFollow on and Telegram And YouTube Join our channel!