Despite having an international base, JPMorgan, a significant player in the financial solutions industry, released a statement urging US authorities to maintain its indirect control over the stablecoin Tether. JPMorgan analysts think that the stablecoin is vulnerable because of its reliance on the US market.
They went on to say that Tether had to be added to the blacklisted wallets according to the Treasury sanctions. Stablecoin dominance is threatened by U.S. crypto rules, and the stablecoin’s transparency is insufficient. In 2022, Tether was forced to prohibit wallets connected to mixer Tornado Cash by the Treasury Department’s sanctions section, the Office of Foreign Assets Control (OFAC), according to a special note released by JPMorgan.
Tornado Cash was sanctioned by the OFAC in 2022 due to suspicions that it had started money laundering. Later, once OFAC flagged the privacy tool Tornado Cash as a sanction breach, Tether blocked the wallet.
The CEO of Tether, Paolo Ardoino, claimed that the circumstances amounted to nothing more than revenge. He went on to explain that JPMorgan is now complaining about the increasing activity in the banking and payment systems, despite the fact that the company was completely inexperienced with them.
Still, experts at JPMorgan predict that upcoming stablecoin laws in the US and Europe would make Tether less appealing when compared to more practical options. Moreover, analysts were unimpressed with Tether’s recent public disclosures, even if they tended to be more transparent.
Tether has received an excellent assessment from credit rating company S&P Global regarding its capacity to maintain its 1:1 dollar parity. JPMorgan analysts hope that sanctions from the appropriate US authorities will affect stablecoins and change their minds as long as Tether is still based abroad.
