JPMorgan, a key player in financial services, has issued a statement urging US authorities to maintain their indirect oversight of the stablecoin Tether, despite its overseas base. Analysts at JPMorgan argue that Tether's reliance on the US market exposes it to vulnerabilities.

They point out that recent Treasury sanctions have led to Tether being added to blacklisted wallets, citing insufficient clarity regarding the stablecoin and potential threats to its dominance posed by US crypto regulations.

In 2022, the Office of Foreign Assets Control (OFAC), the Treasury Department's sanctions division, compelled Tether to block wallets associated with the mixer Tornado Cash, which OFAC had sanctioned for suspected money laundering.

Tether CEO Paolo Ardoino dismissed this action as retaliation, suggesting that JPMorgan, unfamiliar with the new financial landscape, is reacting negatively to increased activity in the sector.

However, JPMorgan analysts predict that forthcoming regulations on stablecoins in the US and Europe will diminish Tether's appeal compared to more viable alternatives. Despite Tether's efforts to provide clarity through public disclosures, analysts remain unimpressed.

On a positive note, S&P Global, a credit rating agency, has provided favorable feedback on Tether's ability to maintain its 1:1 dollar parity.

JPMorgan analysts advocate for US authorities to impose sanctions on stablecoins to influence their operations, while Tether continues to operate offshore.