In a recent report, JPMorgan analysts, led by Nikolaos Panigirtzoglou, expressed concern about Tether's growing dominance in the stablecoin market.

The report highlighted Tether's lack of regulatory compliance and transparency, stating that its increased concentration is seen as a negative for the stablecoin universe and the overall crypto ecosystem.

Companies that operate stablecoins face regulatory risks globally. In the U.S., the Clarity for Payment Stablecoins Act is awaiting approval from Congress. Meanwhile, Europe expects partial implementation of the Markets in Crypto-Assets (MiCA) regulation in June this year. Analysts believe that stablecoin companies that strictly adhere to existing regulations could benefit from the upcoming regulatory scrutiny and potentially gain market share.

Tether CEO Paolo Ardoino responded to JPMorgan's report, saying that he is pleased that Tether and the stablecoin technology created by his company have been recognized by JPMorgan. However, he found it hypocritical for JPMorgan, the world's largest bank, to talk about centralization.

Ardoino attributed the success of Tether's USDT to its financial reliability, strong reserves, and commitment to emerging markets and developing countries.

Circle, another stablecoin company, had recently secretly applied for a public listing in the United States.

JPMorgan analysts interpret the move as Circle's intention to expand internationally and prepare ahead of time for upcoming stablecoin regulations.

According to analysts, stablecoins function almost like "cash" in crypto, acting as a link between traditional finance and the crypto world. According to analysts, their expansion means more money entering crypto from traditional finance, more cash circulation in the crypto space, and an increase in collateral, making the cryptocurrency financial system more stable.

However, analysts also pointed to the downsides created by Tether's increasing market share and regulatory uncertainties.