The European Union’s Markets in Crypto-Assets (MiCA) regulations, effective from December 30, are set to bolster euro-denominated stablecoins, JPMorgan (JPM) noted in a Wednesday research report.

“MiCA enforces the exclusive use of compliant stablecoins as trading pairs on regulated platforms, driving EU exchanges to modify their listings,” analysts led by Nikolaos Panigirtzoglou wrote.

The rules have provided an advantage to compliant tokens like Circle’s EURC while creating hurdles for non-compliant stablecoins such as Tether’s EURT, JPMorgan explained.

Stablecoins, typically tied to assets like fiat currencies, maintain a steady value and are frequently pegged to the U.S. dollar or the euro.

MiCA now mandates that stablecoin issuers maintain robust reserves in EU banks and obtain specific licenses for operations. These requirements led Tether to phase out its EURT stablecoin, with redemptions available for a year, following its November announcement.

EU exchanges have also begun delisting Tether’s USDT, shrinking its foothold in the region. Nevertheless, Tether remains a dominant player in the global stablecoin market, particularly thriving in regions like Asia, where regulatory frameworks are less stringent.

To adapt, Tether has strategically invested in MiCA-compliant initiatives. In recent months, it has backed European stablecoin projects, including Quantoz Payments and StablR, demonstrating its intention to maintain a strong presence in the evolving EU crypto ecosystem.