Tether CEO Paolo Ardoino believes that MiCA’s latest regulatory move exposes banking systems and the use of stablecoins in the EU to “systemic risk.”
In a recent interview with Cointelegraph, Ardoino shared his concerns about a MiCA regulation that was passed and came into effect on June 30. See below.
The newly implemented law requires EU stablecoin issuers to keep at least 60% of their reserves in EU-based bank accounts.
The CEO pointed out that the regulation could be problematic because EU cash deposits above €100,000 are not insured, a relatively small amount for stablecoin companies like Tether (USDT). He argued that the limitations could cause problems similar to those encountered during the Silicon Valley Bank collapse in 2023.
They had $3.3 billion in cash deposits in Silicon Valley Bank. Silicon Valley Bank went bankrupt. We all know that.
Paulo Ardoino, CEO of Tether
He warned that such requirements could endanger stablecoins and exacerbate weaknesses in the banking sector.
The CEO explained that financial institutions operate on a fractional-reserve banking system, where only a small portion of deposited funds are available for timely withdrawals. In the event of high demand for withdrawals, banks will be highly exposed to bank runs, which could likely lead to financial instability.
Ardoino criticized the MiCA regulation, saying it introduces significant systemic risks rather than improving system security.
Tether’s CEO was also asked about Republican presidential candidate Donald Trump’s plan to create a strategic reserve of bitcoin for the United States if elected. He expressed his full support, noting that central banks, particularly in Asia, have been increasing their gold reserves.
He showed how Bitcoin offers superior benefits to gold, even though it is less “understood.” According to Ardoino, Bitcoin is a currency governed by objective mathematical principles, not human trust, making it a valuable asset for national reserves.
Furthermore, he believes that if the United States were to begin acquiring and holding Bitcoin as a reserve asset, it would set an important precedent and encourage other countries to follow suit.
Other cryptocurrency experts, however, have spoken out against building a Bitcoin reserve, citing its volatility.
Ardoino also mentioned that Tether holds a portion of its reserves and profits in Bitcoin. He suggested that if the United States were to adopt a strategic reserve of Bitcoin, it would validate Tether’s strategy and confirm that its approach of including Bitcoin in its portfolio was “correct all along.”
For the full interview, see below.
