Amid registering record-breaking profits, USDT stablecoin issuer Tether has been expanding its market footprint recently. Earlier this week, Tether minted an additional $1 billion while adding $13 billion to its market cap in just the last four months.

However, banking giant JPMorgan has raised concerns stating that this rapid expansion and dominance could be a major risk for the broader crypto market. It also cited the lack of regulatory transparency with Tether.

However, Tether executive Paolo Ardoino was quick to respond saying that the market dominance is ‘negative’ for JPMorgan who’s competing with them in the stablecoin space. Commenting on JPMorgan’s report, Ardoino said:

“Tether’s market domination may be a ‘negative’ for competitors including those in the banking industry wishing for similar success but it’s never been a negative for the markets that need us the most. We’ve always worked closely with global regulators to educate them on the technology and provide guidance on how they must think about it.”

Interestingly, the latest report also shows that Tether’s net profit has now surged to 10% of JPMorgan’s earnings.

JPMorgan: Tether’s Marketing Dominance A Worrying Sign

Over the last year, Tether’s market cap has surged by 35% with the company adding $4 billion in the last month of January alone.

One major reason behind this is Tether’s immediate competitor Circle (USDC) has been losing market share amid regulatory crackdowns. Tether’s stablecoin USDT is on the brink of surpassing $100 billion in circulation, marking a significant milestone for the company.

On Thursday, February 1, JPMorgan pointed out that Tether’s “lack of regulatory compliance and transparency” poses a rising risk for the overall cryptocurrency market. Regulatory scrutiny for stablecoins is on the horizon in both the US and Europe.

The Clarity for Payment Stablecoin Act is currently pending a vote in the US House of Representatives, while a partial implementation of the European Union’s Markets in Crypto-Assets Regulation (MiCA) is anticipated in June this year. JPMorgan wrote:

“Stablecoins issuers that have been more aligned with existing regulations are likely to benefit from the coming regulatory crackdown on stablecoins and gain market share”.

USDT vs USDC

Tether has taken steps to enhance transparency in its operations and finances following a $41 million fine paid to the CFTC in 2021, over the misinformation regarding its reserves. Despite these efforts, the JPMorgan report indicates that the leading stablecoin still falls behind its competitor Circle concerning regulatory compliance for its USDC token.

USDT is currently near four times the size of USDC stablecoin, with both occupying a spot in the top ten crypto list.

The post Tether CEO Slams JPMorgan on Latest USDT Report And ‘Negative’ Outlook appeared first on CoinGape.

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Filed under: News - @ January 1, 1970 12:00 am