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Tether CEO Paolo Ardoino believes MiCA’s latest regulatory move puts banking systems and the use of stablecoins in the EU at a “systemic risk.” 
In a recent <a href="https://www.youtube.com/watch?v=-Fl3rP7jgAc" target="_blank" rel="">interview</a> with Cointelegraph, Ardoino shared his concerns about a passed MiCA regulation that took effect on June 30. See below. 
The newly implemented law requires stablecoin issuers under the EU to keep at least 60% of their reserves in EU-based bank accounts. 
The CEO highlighted that the regulation could be problematic because EU cash deposits above €100,000 are not insured, a relatively small quantity for stablecoin companies like Tether (<a href="https://crypto.news/price/tether/" data-type="link" data-id="https://crypto.news/price/tether/">USDT</a>). He argued that the limitations may cause issues similar to those experienced during Silicon Valley Bank’s collapse in 2023. 
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow"> 
 They had $3.3 billion in cash deposits in Silicon Valley Bank. Silicon Valley Bank went belly up. We all know about that. <cite>Tether CEO Paulo Ardoino</cite>
</blockquote> 
He warned that such requirements might endanger stablecoins and exacerbate weaknesses within the banking sector. 
The CEO explained how financial institutions function on a fractional reserve banking system, where only a small portion of deposited funds are available for timely withdrawals. In the case of a withdrawal request surge, banks will become highly susceptible to runs, which may likely lead to financial instability. 
 You might also like: <a href="https://crypto.news/tether-hires-ex-chainalysis-exec-to-lead-economic-analysis-efforts"> Tether hires ex-Chainalysis exec to lead ‘economic analysis efforts’ </a> 
Ardoino criticized the MiCA regulation, arguing that it introduces significant systemic risks rather than enhancing system security. 
The <a href="https://crypto.news/tag/tether/" target="_blank" data-type="link" data-id="https://crypto.news/tag/tether/" rel="noreferrer noopener">Tether</a> CEO was also asked about Republican U.S. presidential nominee Donald Trump’s plan to create a <a href="https://crypto.news/us-senator-plans-to-announce-legislation-for-strategic-bitcoin-reserve-at-bitcoin-2024/" target="_blank" data-type="link" data-id="https://crypto.news/us-senator-plans-to-announce-legislation-for-strategic-bitcoin-reserve-at-bitcoin-2024/" rel="noreferrer noopener">strategic</a> Bitcoin reserve for the U.S. if elected. He expressed strong support, noting that central banks, particularly in Asia, have increased their gold reserves.&nbsp; 
He showcased how Bitcoin offers superior advantages over gold, although 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 <a href="https://crypto.news/will-trump-create-a-us-bitcoin-strategic-reserve/" target="_blank" rel="noreferrer noopener">national reserves</a>. 
Moreover, he believes if the U.S. started acquiring and holding Bitcoin as a reserve asset, it would set a significant precedent and inspire other countries to follow suit.&nbsp; 
Other crypto experts, however, have argued against having a Bitcoin reserve, <a href="https://www.newsweek.com/rfk-jr-bitcoin-proposal-us-dollar-crypto-experts-1815189" target="_blank" rel="">citing</a> its volatility. 
Ardoino also mentioned that Tether holds a portion of its reserves and profits in Bitcoin. He suggested that if the U.S. adopted a strategic Bitcoin reserve, it would validate Tether’s strategy and confirm that its approach to including Bitcoin in its <a href="https://crypto.news/tethers-usdt-achieves-115b-market-cap-milestone/" target="_blank" rel="noreferrer noopener">portfolio</a> was “correct all along.” 
For the full interview, see below. 
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio">
 <div class="wp-block-embed__wrapper"> <iframe title="Are Exchanges Delisting USDT? | Tether CEO Interview" width="1020" height="574" src="https://www.youtube.com/embed/-Fl3rP7jgAc?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe> 
 </div>
</figure> 
 Read more: <a href="https://crypto.news/tether-set-to-double-workforce-by-mid-2025/"> Tether set to double workforce by mid-2025 </a>

Tether CEO: EU’s MiCA regulation puts stablecoins at risk

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