JPMorgan (JPM) says EU MiCA rules are likely to boost euro-denominated stablecoins

The European Union’s MiCA regulations, which took effect on December 30, are likely to boost euro-denominated stablecoins, JPMorgan said in a research report on Wednesday.

“Under MiCA, compatible stablecoins can only be used as trading pairs in regulated markets, prompting EU exchanges to adjust their offerings,” analysts led by Nikolaos Panigirtzoglou wrote.

This has led to compatible stablecoins like Circle’s EURC gaining strength, while non-compliant stablecoins like Tether’s EURT have faced challenges, the Wall Street bank said.

A Stable coin It is a type of cryptocurrency designed to hold a fixed value and is usually tied to the US dollar, although other currencies and commodities such as gold are also used.

Under the new rules, issuers of stablecoins such as Tether must hold significant reserves in banks based in Europe and must obtain trading licenses, the report noted.

This caused and led to Tether discontinuing its stablecoin EURT Delist USDT JPMorgan said from a number of exchanges located in the European Union.

The stablecoin source said in November that it would do so Phasing out Its stablecoin is in euros, with users able to redeem tokens for up to 12 months.

However, Tether remains a “dominant force” in the global stablecoin market despite these challenges, the bank said, adding that it is widely used in Asian markets where there are fewer restrictions.

Investing Tether in MiCA compliant stablecoin issuers e.g Quantose Payments The report added that this shows its commitment to maintaining its presence in the European Union.

The company said in December that it had done so as well invested At the European stablecoin issuer StablR.

Read more: Tether invests in MiCA-compliant stablecoin issuer, StablR