USDT issuer Tether could face challenges if proposed U.S. stablecoin regulation is passed, and the company may have to sell some of its reserves to comply with the new rules, Wall Street bank JPMorgan (JPM) said in a research report Wednesday.
The Senate’s Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act mandates federal regulation for stablecoins with a market cap of over $10 billion, the report noted, with the potential for state regulation if it aligns with federal rules. The House of Representatives STABLE Act calls for state regulation without any conditions.
“Reserve requirements under the STABLE Act are stricter, allowing insured deposits, U.S. T-bills, treasury short-term repo and central banks reserves,” analysts led by Nikolaos Panigirtzoglou wrote, adding that the Senate bill also permits money market funds and reverse repos.
“Both bills allow only high quality and liquid assets as reserves,”…
