Tether CEO commented on JPMorgan report
Tether CEO commented on JPMorgan report
The recent rise in the market capitalization of stablecoins and the growing dominance of Tether (USDT) have raised concerns for JPMorgan.
"Tether carries high risks due to its lack of regulatory compliance and transparency. We view the growing concentration of USDT as a negative for the stablecoin market and the crypto ecosystem as a whole," JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a report.
In response, Paolo Ardoino, CEO of Tether, said that USDT's market dominance is only "negative" for competitors like JPMorgan, who are themselves looking to enter the stablecoin market.
Regarding the regulatory framework, Ardoino said: "We have always worked closely with global regulators to educate them about this technology and provide guidance on how they should treat it."
According to CoinGape, Tether has made more than $1 billion since the beginning of the week, increasing its market capitalization by $13 billion in the last four months alone.
The banking giant noted that stablecoin issuers face risks around the world. In the US, the Clarity for Payment Stablecoins Act is awaiting congressional approval, while Europe is set to launch partial regulation of cryptoasset markets (MiCA) in June this year.
On Thursday, February 1, JPMorgan noted that Tether's "lack of regulatory compliance and transparency" poses a growing risk to the entire cryptocurrency market. Stablecoin regulation is on the horizon in both the US and Europe.
"Stablecoin issuers that are more compliant with existing regulations are likely to benefit from upcoming regulatory action on stablecoins and gain market share," JPMorgan said.
However, Tether's CEO stressed: "USDT's success is due to its financial strength, reserves, and commitment to emerging markets. We are targeting countries where communities use Tether as a lifeline to protect families from rising inflation and currency devaluation."
Stablecoins are the element that connects traditional finance to the world of cryptocurrency, acting as cash in the digital space.
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