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JPMorgan Warns of Risks in Tether’s Crypto Dominance

JPMorgan Warns of Risks in Tether’s Crypto Dominance

In a recent research report, JPMorgan (JPM) expressed concerns about the increasing dominance of stablecoin tether (USDT) within the cryptocurrency ecosystem.

According to the bank, the growing concentration of tether over the past year is perceived as a drawback for the stablecoin space and the broader crypto landscape.

JPMorgan highlighted the regulatory risks faced by stablecoins in various jurisdictions, emphasizing that tether is particularly vulnerable due to its lack of regulatory compliance and transparency.

Analysts, led by Nikolaos Panigirtzoglou, suggested that this regulatory uncertainty creates an opportunity for other stablecoins aligned with existing regulations. In this context, USD Coin (USDC), which has filed for a public offering in the U.S., is identified as a potential beneficiary.

The report notes USDC’s proactive approach in expanding across jurisdictions and preparing for upcoming stablecoin regulations.

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The bank acknowledges tether’s recent substantial growth in market cap and market share, attributing it to widespread adoption on both centralized crypto exchanges and decentralized finance (DeFi) platforms.

Tether reported a record-breaking $2.85 billion profit for the previous quarter and disclosed that its flagship token is on the verge of reaching a $100 billion market capitalization. Additionally, JPMorgan points out that tether has capitalized on the “turbulence” experienced by peers like USDC and Binance’s BUSD.

Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.

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