Ethereum

Tornado

JPMorgan, in a research report released on Thursday, highlighted the vulnerability of Tether (USDT) as the largest stablecoin, attributing it to the coin’s reliance on the American market and impending regulations.
Despite Tether not being headquartered in the U.S., regulatory authorities retain some influence over its offshore utilization through the Office of Foreign Assets Control (OFAC), the report outlined. An example cited by the bank is Tether’s connection with Tornado Cash, a crypto-mixer operating on the Ethereum network, which was blacklisted by OFAC in August 2022 for alleged involvement in money laundering activities.
According to analysts led by Nikolaos Panigirtzoglou, while direct legal actions against offshore entities and decentralized firms pose challenges, indirect measures and international cooperation could potentially impede Tether’s usage. The forthcoming stablecoin regulations are anticipated to exert “indirect pressure” on Tether, as compliance with new regulatory Know Your Customer (KYC) and Anti-Money Laundering (AML) standards becomes paramount. This regulatory scrutiny is expected to extend to the decentralized finance (DeFi) sector, where Tether serves as a key source of collateral and liquidity. Moreover, the report highlighted that stablecoin regulations are likely to be coordinated globally through the Financial Stability Board (FSB) across the G20, further limiting the usage of unregulated stablecoins like Tether.
Despite Tether’s efforts to enhance transparency by working towards publishing real-time data about its reserves, JPMorgan remains skeptical, asserting that the recent disclosures by the stablecoin issuer are insufficient to allay concerns.
The post <a rel="noopener noreferrer nofollow" href="https://www.unlock-bc.com/118229/regulators-tighten-leash-on-global-stablecoins-tether-in-the-spotlight/">Regulators Tighten Leash on Global Stablecoins: Tether in the Spotlight</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://www.unlock-bc.com">UNLOCK Blockchain</a>.

Regulators Tighten Leash on Global Stablecoins: Tether in the Spotlight

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