What's the current news in the crypto world?
Trouble involving Tether, the giant stablecoin.
Stablecoins are digital coins designed to remain stable, from which their price does not continue falling or rising tremendously. Generally, they are pegged to money in the real world, like the USD. This coin of Tether is the most stable and widely used, but things might be about to get rough for Tether.
JPMorgan, one of the largest banks, feels that new rules being put into effect in Europe will spell significant problems for Tether. New rules require more transparency from stablecoin issuers over the backing of their coins. This could be quite a challenge since Tether has not been very open about the details of its reserves.
Under MiCA, the new European rules, stablecoin firms should keep most of their money in European banks. That may force Tether to change the way it manages its funds. If Tether is unable or unwilling to alter its practices, it risks losing its top spot in the world of stablecoins.
Tether didn't seem so happy about what JPMorgan is saying.
The company believes that a bank does not understand how the crypto world actually works. Tether responded that they have already been open about their risk management and coin stability mechanisms. They further highlighted that they had large user trust.
The case in point is a situation demonstrating how the crypto world changes. Governments are starting to really pay more interest to digital money. It means that they want to make sure everything is safe and doesn't cause any possible problems for the economy. This could be big changes for companies like Tether who have spent years doing things their own way.
The new rules may once and for all bring stablecoins to the mainstream if they prove safe and under control. More people might start using them. Of course, that would be good for the whole crypto world, even though some companies will have to change how they work.