According to PANews, JPMorgan pointed out in a research report on Wednesday that increasingly stringent stablecoin regulation may pose a major challenge to Tether's market dominance.

Under Europe’s Markets in Crypto-Assets (MiCA) Directive, 60% of stablecoin reserves must be held in European banks, which may force Tether to adjust its reserve management strategy.

Tether has previously come under regulatory scrutiny for its lack of transparency into the composition of its reserves, and the new regulations will further increase pressure on it to disclose detailed information and conduct audits.

JPMorgan believes that if Tether fails to comply with these new regulations, its dominance in the stablecoin market will be threatened.