Against EU banking regulations 🏦💣
Are stablecoins in Europe walking towards the abyss? Tether's CEO, Paolo Ardoino, didn't hold back and let 🔥 loose in his latest interview, warning that the new regulations from the European Union could trigger a banking storm of historical proportions. Yes, he sees it that seriously.
During the podcast Less Noise More Signal, Ardoino harshly criticized the legal framework that forces stablecoin issuers to keep up to 60% of their reserves in UNINSURED bank deposits. That is, putting billions of euros in the hands of small banks that might not withstand a massive withdrawal.
🔥 'It's like spitting at the fire!' said the CEO. And he wasn't joking: he gave a brutal example. If a stablecoin has 10 billion euros in circulation, and must keep 6 billion in small banks, with insurance of barely 100,000 euros per account, the risk is enormous.
👉🏻 And it didn't stop there:
• Compared this situation to the collapse of Silicon Valley Bank in 2023 ⚠️
• Explained how banks operate with fractional reserve (they can lend up to 90%) and that exacerbates the fragility of the system
• Warned that a simple wave of withdrawals could generate a domino effect: bank failure → stablecoin failure → blame crypto!
Ardoino was blunt: 'Regulators want to protect the banking system, but they could be sowing a crisis.' According to him, large banks like UBS would not accept crypto deposits, pushing issuers like Tether towards smaller entities with less financial muscle.
What's worse? If something goes wrong, 'they declare you bankrupt, not because of your fault, but because of the bank's... and then the government will say: 'I told you, stablecoins are dangerous.'
This speech comes just as Tether prepares to launch a new stablecoin based in the U.S. and expands its investments outside the crypto world, like its recent participation in Adecoagro (Latin American agribusiness producer).
📌 Sources: CoinDesk, interview with Paolo Ardoino on Less Noise More Signal, Twitter of @joshdcaplan
🤔💬 What do you think?
Is Ardoino right to sound the alarm? Are we underestimating banking risk in Europe?
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