Tether CEO Warns EU’s MiCA Regulation May Increase Financial Risk

Tether’s CEO, Paolo Ardoino, has raised alarms about the European Union's new Market for Crypto Assets (MiCA) regulation, suggesting it might increase systemic risk rather than provide stability.

Implemented on June 30, MiCA imposes stringent rules on stablecoin operations within the European Economic Area. It mandates that at least 60% of the reserves supporting stablecoins be held in EU bank accounts.

Ardoino argues that this could strain financial institutions already working under a fractional reserve banking model, potentially heightening systemic risk.

He criticized MiCA for not enhancing the security of the financial system but rather contributing to its fragility, especially given the limited insurance coverage of cash deposits in the EU, which is capped at $100,000.

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Ardoino believes this could jeopardize the stability of large stablecoin issuers like Tether.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.