In a research note on Wednesday, JPMorgan noted that increasingly stringent stablecoin regulations could pose a significant challenge to Tether's market dominance. Under the European Crypto Asset Markets Act (MiCA), 60% of stablecoin reserves must be held in European banks, which could force Tether to adjust its reserve management strategy. Tether has previously come under regulatory scrutiny for its lack of transparency in the composition of its reserves, and the new regulations will further increase the pressure on it to disclose details and conduct audits. JPMorgan believes that if it fails to comply with these new regulations, Tether's dominance in the stablecoin market will be threatened.