Tether's $8 Billion Bitcoin Holdings Under U.S. Stablecoin Scrutiny

Tether's $8 Billion Bitcoin Holdings Face Scrutiny Amid U.S. Stablecoin Regulations

Tether, the issuer of the world's largest stablecoin, USDT, is under scrutiny for its substantial Bitcoin holdings, valued at around $8 billion, as the U.S. Congress considers new stablecoin regulations. According to insights from 21.co Strategy Analyst Tom Wan, Tether currently possesses approximately 83,700 Bitcoins, representing about 0.4% of the entire Bitcoin supply.

In light of prospective U.S. regulatory measures for stablecoins, a JPMorgan analyst indicated that Tether may need to divest certain non-compliant assets, including its Bitcoin holdings, precious metals, and various types of corporate debt. The U.S. Congress is actively considering two significant stablecoin regulations: the STABLE Act in the House and the GENIUS Act in the Senate. These legislative proposals aim to enforce rigorous licensing frameworks and risk management expectations for stablecoin issuers.

Under the STABLE Act, it has been suggested that a mere 66% of Tether's reserves meet compliance, whereas the GENIUS Act sets the standard at 83%. JPMorgan's analyst Nikolaos Panigirtzoglou noted a worrying trend in Tether's compliance ratios since mid-2024 amidst rising stablecoin issuance. This has raised concerns about Tether's ability to maintain its reserves and comply with potential regulatory requirements.