Is Tether's Dominance in Jeopardy? The Uncertain Future of the Largest Stablecoin

EddieJayonCrypto

 16 Feb 24

tl;dr

Tether's (USDT) dominant position as the largest stablecoin is vulnerable due to its dependence on the American market and pending regulations, as the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) can exert some control over the stablecoin issuer’s offshore usage. Tether’s assoc...

Tether's (USDT) dominant position as the largest stablecoin is vulnerable due to its dependence on the American market and pending regulations, as the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) can exert some control over the stablecoin issuer’s offshore usage. Tether’s association with crypto-mixer Tornado Cash is one such example, and international cooperation could hinder the usage of USDT. With forthcoming stablecoin regulation and pressure for greater transparency, Tether's future is uncertain.

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) can exert some control over the stablecoin issuer’s offshore usage. Tether’s association with crypto-mixer Tornado Cash is one such example. International cooperation could hinder the usage of USDT. Tether’s (USDT) dominant position as the largest stablecoin is vulnerable due to its dependence on the American market and pending regulations, JPMorgan (JPM) said in a research report Thursday. Despite Tether not being based in the U.S., regulators are able to exert some control on the stablecoin issuer’s offshore usage through the Office of Foreign Assets Control (OFAC), the report said. The stablecoin's association with Tornado Cash is one such example, the bank said, noting that OFAC blacklisted the crypto-mixer that ran on the Ethereum network in August 2022, accusing it of facilitating money laundering.

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