JPMorgan (JPMorgan) said in a research report on February 1 that the growing dominance of the stablecoin Tether (USDT) has negative implications for the broader crypto-asset (virtual currency) ecosystem. said.

“The increased concentration on Tether over the past year has been negative for the stablecoin world and the broader crypto asset ecosystem,” the bank said in a statement.

Analysts led by Nikolaos Panigirtzoglou said: “Stablecoins face regulatory risks in multiple jurisdictions, and Tether is largely unprofitable due to a lack of regulatory compliance and transparency. are at risk in several locations.”

But there is an opportunity for other stablecoins. Issuers that are more in line with existing regulations may benefit from enforcement and gain market share as a result, the bank said.

USD Coin (USDC), which has filed to go public in the United States, could be one such beneficiary. “It appears to be looking to expand across jurisdictions and actively preparing for upcoming stablecoin regulations,” the report said.

JPMorgan notes that Tether has recently been widely adopted by centralized crypto exchanges and decentralized finance (DeFi) platforms, and has seen significant growth in both market capitalization and market share. Last week, the stablecoin issuer reported record profits of $2.85 billion in the last quarter, increasing the token’s market capitalization to nearly 1,000 yen. He said that it had reached 100 million dollars (approximately 15 trillion yen).

USDT has also benefited from “wild swings” in peers such as USDC and Binance Coin (BUSD), the report said. .

｜Translation: CoinDesk JAPAN
｜Edited by: Toshihiko Inoue
｜Image: Nikhilesh De/CoinDesk
｜Original text: Stablecoin Tether’s Increasing Dominance Is Bad for Crypto Markets, JPMorgan Says