Tether may need to sell its Bitcoin holdings to comply with proposed U.S. stablecoin regulations, according to JPMorgan analysts, as reported by The Block.

Experts estimate that only 66%-83% of USDT reserves meet the proposed requirements.

Their conclusions are based on two legislative proposals: the Stablecoin Transparency and Accountability for a Better Economy (STABLE) Act in the House of Representatives and the Guiding and Ensuring National Innovation for U.S. Stablecoins (GENIUS) Act in the Senate.

If either bill is enacted, Tether may be forced to divest its Bitcoin holdings, along with other non-compliant assets such as gold, corporate bonds, and secured loans, in favor of U.S. Treasuries and other highly liquid and reliable assets.

Currently, Tether holds 83,758 BTC, valued at approximately $8.04 billion.

JPMorgan analysts suggest that the adoption of one of these bills could weaken Tether’s dominant position in the U.S. market.

“U.S. regulations require greater transparency and regular audits of reserves, which poses additional challenges for Tether,” they concluded.

Stablecoin regulations are expected to be finalized by the end of the year.

In 2023, Tether announced regular investments in Bitcoin. In February 2024, the company revealed plans to develop an AI application for Bitcoin wallets.