Tether CEO Paolo Ardoino believes that MiCA’s recent regulatory move puts banking systems and the use of stablecoins in the EU at “systemic risk.”
Recently interview With Cointelegraph, Ardoino shared his concerns about the MiCA regulations that were passed and went 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 highlighted that the regulation could be problematic because cash deposits in the EU over €100,000 are uninsured, a relatively small amount for stablecoins like Tether (USDT). He claimed that the restrictions could cause problems similar to those faced during the collapse of Silicon Valley Bank in 2023.
They had $3.3 billion in cash deposits in a Silicon Valley bank. And Silicon Valley went bankrupt. We all know that.
Tether CEO Paolo Ardoino
He warned that such requirements could put stablecoins at risk and exacerbate vulnerabilities within the banking sector.
The CEO explained how financial institutions operate on a fractional reserve system, where only a small portion of deposited funds are available for withdrawal at any given time. If withdrawal requests increase, banks will be highly vulnerable to a run on funds, which could potentially lead to financial instability.
Arduino has criticized the MiCA regulation, arguing that it poses significant systemic risks rather than enhancing system security.
The Tether 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 strong support, noting that central banks, especially in Asia, have increased their gold reserves.
Arduino explained how Bitcoin offers advantages over gold, although it is less “understood.” According to Arduino, 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 US starts acquiring and holding Bitcoin as a reserve asset, it will set an important precedent and inspire other countries to follow suit.
However, other cryptocurrency experts have argued against having a Bitcoin reserve, Martyrdom Its fluctuations.
Ardoino also noted that Tether keeps a portion of its reserves and profits in Bitcoin. He suggested that if the US adopted a strategic reserve of Bitcoin, it would validate Tether’s strategy and confirm that its approach to including Bitcoin in its portfolio was “right from the beginning.”
To read the full interview, see below.