Tether(USDT) CEO "European MiCA Law, a Risk Factor for Stablecoins"

JH Kim

Summary

Paolo Ardoino, the CEO of Tether, stated that the MiCA law poses potential risks to stablecoins.
He pointed out that the MiCA law requires 60% of stablecoin reserves to be deposited in cash, which could exert liquidity pressure on small and medium-sized banks.
Small and medium-sized banks may find it difficult to manage stablecoin reserves stably and could be exposed to bank run risks in the event of large-scale redemptions.

Paolo Ardoino, the CEO of Tether(USDT), stated in an interview with Cointelegraph on the 1st (local time) that "the reason Tether has not registered as a business in Europe is because the local cryptocurrency regulation law, MiCA, poses potential risks to stablecoins."

He pointed out that "cryptocurrency companies must comply with regulations in each country, but in Europe, there are concerns that compliance itself could become a risk," adding that "MiCA could impose significant burdens not only on stablecoins but also on small and medium-sized banks."

Ardoino warned that "MiCA requires 60% of stablecoin reserves to be deposited in cash at European banks, which could cause severe liquidity pressure on some banks, potentially leading to bankruptcy within a few years."

Meanwhile, it is analyzed that small and medium-sized banks, due to the structure of having to stably manage stablecoin reserves that can be massively redeemed, have limited asset management flexibility and could be exposed to bank run risks in the event of large-scale redemptions.