JPMorgan predicts the growth of euro-pegged stablecoins after MiCA comes into force

The EU-wide Markets in Crypto-Assets (MiCA) regulation obliges issuers of stablecoins to keep reserves in local banks and obtain licenses

10.01.2025 - 13:15

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What’s new? The European Union’s Markets in Crypto-Assets (MiCA) regulation, which came into force on December 30, could lead to the rise of euro-pegged stablecoins, said analysts at JPMorgan Bank (JPM). It is noted that only MiCA-compliant stablecoins can be used in trading pairs in regulated markets, which has forced exchanges to adjust their offerings.

Material by CoinDesk

What else is known? As a result, rule-compliant stablecoins such as EURC from issuer Circle are gaining traction, while EURT from Tether has run into problems as it does not meet MiCA requirements.

Under the new rules, stablecoin issuers are required to maintain significant reserves in banks based in Europe and obtain trading licenses.

As a result, Tether announced in November that it would cease issuing EURT, and users will be able to redeem the asset over the next 12 months. In addition, a number of EU-based crypto exchanges delisted Tether’s USDT. It is the largest dollar-pegged stablecoin in the crypto market, behind only bitcoin and Ethereum in terms of capitalization at $137,4 billion.

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The European Union’s Markets in Crypto-Assets law introduces new requirements for issuers of stablecoins

Despite these problems, Tether remains a “dominant force” in the global stablecoin market because it is widely used in Asian markets where there are fewer restrictions, JPMorgan writes.

In addition, Tether’s investments in MiCA-compliant stablecoin issuers such as Quantoz Payments demonstrate its commitment to maintaining a presence in the EU. In December, the company said it also invested in European stablecoin issuer StablR.

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