The EU’s MiCA rules, which took effect on Dec. 30, are likely to boost euro-denominated stablecoins, JPMorgan ( JPM ) said in a research report on Wednesday.

“Under MiCA, only compatible stablecoins can be used as trading pairs on regulated markets, prompting EU exchanges to adjust their offerings,” wrote analysts led by Nikolaos Panigirtzoglou.

This has resulted in compliant stablecoins such as Circle’s EURC gaining strength, while non-compliant stablecoins such as Tether’s EURT faced challenges, the Wall Street bank said.

A stablecoin is a form of crypto designed to hold a stable value and is usually pegged to the US dollar, although other currencies and commodities such as gold are also used.

Under the new rules, stablecoin issuers like Tether are required to maintain significant reserves in banks based in Europe and must secure licenses to trade, the report noted.

This has prompted Tether to discontinue its EURT stablecoin and has resulted in the delisting of USDT from a number of exchanges based in the EU, JPMorgan said.

The stablecoin issuer said in November that it would phase out its euro stablecoin, with users able to redeem tokens for up to 12 months.

Still, Tether remains a “dominant force” in the global stablecoin market despite these challenges, the bank said, adding that it is widely used in Asian markets, where there are fewer restrictions.

Tether’s investment in MiCA-compliant stablecoin issuers such as Quantoz Payments shows it is committed to maintaining a presence in the EU, the report added.

The company said in December that it had also invested in European stablecoin issuer StablR.

Read more: Tether Invests in MiCA Compliant Stablecoin Issuer StablR