CoinVoice has learned that, according to CoinDesk, Tether CEO Paolo Ardoino criticized the EU's stablecoin regulatory framework during an interview with the Less Noise More Signal podcast. This framework forces stablecoin companies like Tether to keep a significant portion of their reserves (up to 60%) in uninsured bank deposits. Due to the intersection of high-risk loans and new cryptocurrency regulations, Europe may soon face a wave of bank failures.
Paolo Ardoino added that the European regulatory system is intended to assist banks in the Eurozone by providing more liquidity, but it has created 'significant systemic risk' because large European banks like UBS do not integrate stablecoins into the banking system. This ultimately forces stablecoin issuers to choose smaller banks, further exacerbating the risks. [Original link]