Regaining trust is much harder than losing it. Despite the more than impressive figures from its latest financial reportthe society Tether has a dark past that sticks to him. Gray areas and small arrangements which clearly worry JP Morgan bank analysts. The latter even consider that the group issuing the USDT stablecoin would be a major potential weakness that would threaten the cryptocurrency market.
JP Morgan views the success of the USDT stablecoin negatively
The stablecoin USDT of Tetherwith a capitalization of more than 96 billion dollars is the undisputed leader in the sector. Indeed, its closest competitor the stablecoin USDC of Circle has for its part a capitalization of less than $27 billion.
But this (too great?) success seems to pose a problem for specialists in the markets of J.P. Morgan. As The Block reports in particular, the “ low compliance and transparency » does not sit well with the analysts of the large banking group.
“Tether is primarily at risk due to its lack of regulatory compliance and transparency. (…) We therefore consider the growing concentration of [stablecoins du dollar] in Tether’s USDT, over the past year, as a negative element for the stablecoin universe and more broadly for the entire crypto ecosystem. »
Excerpt from the latest report from JP Morgan market analysts
Tether defends itself from these recurring attacks on its level of compliance
Its competitor Circle indeed seems more pro-active in terms of regulatory compliance. In France for example, Circle has validated a registration as a PSAN (Digital Asset Service Provider) in December 2023.
However, for some, Tether has on the contrary recently demonstrated a too much collaboration with the American authorities. Whether with theOFAC (Office of Foreign Assets Control) For freeze USDT wallets sanctioned by this US organization, or even with the FBI (Federal Bureau of Investigation) to fight against money laundering. The criticisms of the mega-bank JP Morgan have therefore a little warmed the ears of Paolo Ardoino, the new CEO of Tether since October 2023:
“I am pleased to read that JP Morgan recognizes the importance of Tether and the stablecoin technology developed by our company. (…) But it seems a little hypocritical to me that this speech about too much concentration comes from JP Morgan, the largest bank in the world. (…) The success of Tether USDT is driven by its financial reliability and strong reserves (…). »
Paolo Ardoino, CEO of Tether
Speaking of Tether’s reserves, it is true that the stablecoin issuer has started to regularly accumulate bitcoins (BTC). The crypto-company would have even piled up 66,465 BTC so far, a nice jackpot of almost $2.9 billion. But it will undoubtedly take even more to regain trust of the most skeptical about USDT.