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CDS Crypto News JPMorgan Warns: Rising Dominance of Stablecoin Tether Could Spell Trouble for Cryptocurrency Markets

Crypto News

JPMorgan Warns: Rising Dominance of Stablecoin Tether Could Spell Trouble for Cryptocurrency Markets

The report suggests that other stablecoins like USD Coin could see advantages from impending regulatory measures, potentially expanding their market presence.

sevval05/02/20241 Mins read376

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.

Sources:coindesk

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sevval

Şevval has been actively writing since 2022 and is a third-year mathematics student at Ankara University. Her interest in writing is shaped particularly around innovative technologies such as Web3, artificial intelligence, and blockchain. She closely follows developments in these fields and aims to convey complex topics to readers in a clear and engaging manner. She enjoys combining her mathematical knowledge with technology to create content and strives to raise awareness about the digital world of the future.

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