There’s been a bit of drama brewing in stablecoins, and this time its JPMorgan that’s stirring the pot.

The banking giant dropped a report suggesting Tether might need to sell some Bitcoin to play nice with new U.S. regulations. 

And Tether's response was… well, let’s just say it doesn’t appear the two companies are on the best terms. 

How Much To Dump?

According to JPMorgan's math, only 66% of Tether's reserves would pass the STABLE Act, and 83% would make it through the GENIUS Act. 

For a company sitting on $142 billion in market cap, that's kind of a big deal.

It would mean that, at most, Tether would have to kiss goodbye over $48 billion worth of reserves, a lot of that in Bitcoin, to comply with the STABLE act.

But why?

Well, the U.S. is cooking up some new rules for stablecoins, and JPMorgan is asserting that Tether might need to swap some of their spicier assets (Bitcoin, precious metals, corporate paper) for boring old Treasury bills to comply.

If that’s true, Tether would begin to look a lot more like a bank than a crypto company.

Tether Says “No Way”

Tether came out of the gate swinging with a strong denial against the assertion.

For the record, the crypto giant is sitting on a $20 billion liquidity surplus and bragging about making $1.2 billion per quarter just from U.S. Treasuries alone.

It’s the most profitable company in the world on a per employee basis.

Their CEO, Paolo Ardoino, scoffed at the report, claiming that JPMorgan's analysts are just upset because their antiquated firm doesn’t allot them to own Bitcoin. 

Well, that sets the record straight.

Meanwhile, while everyone has been arguing about regulations in the US, Tether just packed its bags and moved to El Salvador. 

So, in the end, it begs the question whether or not the company will even need to follow these U.S. rules in the first place – not your home turf, not your house rules.

The Divestment That Wasn’t

The thing is that nobody knows which bill, if any, is actually going to pass. 

But with Tether controlling 60% of the stablecoin market, whatever happens next matters – and any decision that the US comes to will not doubt firmly consider how it will impact Tether, adn how Tether’s massive Treasury holdings could in turn impact the Treasury market..

While Tether could always change its tune and dump Bitcoin of US Treasuries, right now they’re giving a clear signal that they have no plans to do so. 

And they’re willing to change the jurisdiction of the entire twelve-figure company to keep it that way.