Crypto News– PMorgan cautioned in a research report released on Thursday that the growing dominance of stablecoin Tether (USDT) poses risks to the broader cryptocurrency ecosystem. The bank expressed concern over the increasing concentration of Tether over the past year, seeing it as a negative development for both stablecoins and the wider crypto market.
JPMorgan Warns: Rising Dominance of Stablecoin Tether Could Spell Trouble for Cryptocurrency Markets
Stablecoins, including Tether, are encountering regulatory challenges across various jurisdictions, with Tether identified as particularly vulnerable due to its lack of regulatory compliance and transparency, according to analysts led by Nikolaos Panigirtzoglou.
However, the report also highlighted potential opportunities for other stablecoins. Stablecoin issuers that have adhered more closely to existing regulations could benefit from any regulatory crackdown on Tether, potentially gaining market share as a result. USD Coin (USDC), for instance, which has pursued public offering plans in the U.S., may stand to gain from its proactive approach to expanding across jurisdictions and preparing for forthcoming stablecoin regulations.
JPMorgan observed significant growth in both market capitalization and market share for Tether, with widespread adoption on centralized cryptocurrency exchanges and decentralized finance (DeFi) platforms. Notably, Tether reported record-breaking profits of $2.85 billion in the previous quarter and revealed that its flagship token is nearing a $100 billion market capitalization milestone.
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