Tether May Sell $8 Billion in Bitcoin Holdings to Address US Compliance Risks

Tether’s substantial Bitcoin holdings and compliance with emerging U.S. stablecoin regulations have drawn the attention of financial analysts.

Recent disclosures indicate that the stablecoin issuer holds approximately 83,759 BTC, valued at over $8.02 billion. This amount represents 0.4% of Bitcoin’s total supply. 

Meanwhile, latest analysis by JPMorgan has noted that maintaining such assets may pose regulatory challenges as new stablecoin policies take shape in the United States and Europe.
Tether’s Bitcoin Reserves and Compliance Risks
Tether’s Bitcoin reserves increased on December 30, when a wallet associated with the company acquired 8,404 BTC worth $776.6 million. 

JPMorgan analysts have assessed Tether’s reserve compliance with U.S. stablecoin regulations. They estimate that only 66% to 83% of its reserves meet proposed standards, marking a decline in compliance levels since mid-2024.

The rise in stablecoin supply has contributed to this shift. Analysts suggest that regulatory adjustments could require the company to divest certain non-compliant assets, including Bitcoin, corporate notes, secured loans, and precious metals.

Tether CEO Paolo Ardoino commented on social media platform X, suggesting that JPMorgan analysts’ dissatisfaction stems from not holding Bitcoin. 

https://twitter.com/paoloardoino/status/1890012588559446245?ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank

Proposed US Stablecoin Regulations
The evolving U.S. stablecoin regulatory landscape presents varying requirements under different legislative proposals. The Senate’s GENIUS Act mandates federal oversight for stablecoins with a market capitalization exceeding $10 billion.

It allows state-level regulation only if it aligns with federal guidelines. Meanwhile, the House’s STABLE Act offers more flexibility, permitting state regulation without additional conditions.

Differences in reserve requirements also distinguish the two bills. The STABLE Act enforces stricter standards, limiting reserves to insured deposits, U.S. Treasury bills, short-term Treasury repos, and central bank reserves.

The Senate’s version provides more leeway by including money market funds and reverse repos. Additionally, the Senate proposal prioritizes stablecoin holders in issuer bankruptcy cases, further shaping how issuers manage their reserves.
Previous Regulatory Scrutiny 
Tether faces further regulatory scrutiny in Europe under the Markets in Crypto Assets (MiCA) legislation. Per reports from last year, the law required stablecoin issuers to allocate at least 60% of reserves to European banks.

Analysts indicated that Tether’s reserve composition requires restructuring to comply with these regulations.

The report highlighted past concerns regarding Tether’s transparency in disclosing its reserve composition. The analysts suggested that new regulatory frameworks could increase pressure for greater financial disclosures and audits. Non-compliance with these rules may impact the stablecoin issuer’s market position as competition intensifies.