The EU's MiCA regulations, effective as of December 30, are anticipated to bolster euro-denominated stablecoins, according to a report by JPMorgan (JPM) released on Wednesday.

"Under MiCA, only compliant stablecoins can be used as trading pairs in regulated markets, prompting EU exchanges to adjust their offerings," analysts led by Nikolaos Panigirtzoglou stated.

This shift has strengthened compliant stablecoins like Circle's EURC, while non-compliant options such as Tether's EURT are encountering more difficulties.

A stablecoin is a type of cryptocurrency that maintains a stable value often pegged to fiat currencies, such as the U.S. dollar, although commodities like gold are also utilized.

Under the new regulations, issuers like Tether must hold substantial reserves in EU banks and secure trading licenses, which has led to Tether discontinuing its EURT stablecoin and the removal of USDT from various EU exchanges.

JPMorgan highlights that despite the obstacles, Tether remains a significant player in the global stablecoin realm, especially in Asian markets where regulations are less stringent. Additionally, Tether's investments in compliant stablecoin issuers, such as Quantoz Payments, reflect its commitment to maintaining a presence in the EU.