2024-02-16 17:00:38
Tether’s USDT’s attractiveness relative to other stablecoins is likely to diminish as future U.S. regulations require greater transparency and compliance with new KYC/AML standards, JPMorgan said. This is reported by CoinDesk with reference to the analysts’ report.
Even though Tether is located outside the United States, regulators may exercise “some control” over the issuer’s offshore use of “stable coins” through OFAC, the document said.
The Stable Coin Payment Transparency Act is currently being considered by the US Congress, and partial implementation of MiCA is expected in the EU in June.
“While direct legal action against offshore companies and decentralized firms is difficult, indirect measures and international cooperation could potentially disrupt the use of Tether,” the analysts wrote.
JPMorgan believes that rules for stablecoins will be coordinated globally through the Financial Stability Board within the G20. This situation will further limit the capabilities of unregulated “stable coins” like USDT.
Tether periodically reports on the reserve provision of its assets, but analysts believe that the volume of disclosure is not enough to “allay concerns.”
Earlier, JPMorgan pointed to the growing dominance of USDT as a negative factor for the stablecoin market and the crypto ecosystem as a whole.
Let us remind you that at the end of October-December 2023, Tether received a record net profit of $2.9 billion.
From December 1 of the year, the issuer began to freeze wallets associated with SDN Office of Foreign Assets Control of the US Department of the Treasury. The company also pointed to its assistance to agencies such as the Justice Department, the Secret Service and the FBI.
Previously, Tether expressed disappointment with the UN’s assessment of the use of USDT in illegal activities and ignoring the asset’s role in developing economies.
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