JPMorgan has expressed concerns about the growing dominance of USDT (Tether) in the stablecoin market, despite the recent encouraging growth in the total capitalization of stablecoins.
In a report released on Thursday, analysts at JPMorgan, led by Nikolaos Panigirtzoglou, stated, “Given its lack of regulatory compliance and transparency, Tether faces the greatest risk. Therefore, we believe that the increase in Tether's concentration over the past year is negative for the stablecoin universe and the broader crypto ecosystem.”
The analysts noted that stablecoin issuers face regulatory risks globally. In the United States, the “Clarity for Payment Stablecoins Act” is awaiting approval from Congress. Additionally, in Europe, the Markets in Crypto Assets (MiCA) regulations are expected to be partially implemented in June of this year. According to the analysts, stablecoin issuers who strictly adhere to existing regulations are likely to benefit from the upcoming regulatory scrutiny and may gain market share.