EU Stablecoin Reserve Regulations Spark Controversy Among Industry Experts and Investors
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1 min read
In a recent podcast and conference, Paolo Ardoino, the Chief Executive Officer of Tether, has strongly criticized the European Union’s (EU) new regulations regarding stablecoin reserves. During his discussion, he compared the policy to past bank failures, highlighting concerns over potential financial instability across Europe.
The European Union’s MiCA framework aims to regulate stablecoin reserves held by banks in its member states. However, Ardoino is adamant that this policy mimics dangerous banking practices and poses a risk to substantial holders of funds. He emphasized that the EU’s “bank insurance” only covers up to 100,000 euros, leaving large deposits uninsured. This, according to Ardoino, would be akin to “spitting on a fire.”
Ardoino drew parallels between this situation and past bank failures, including the recent collapse of Silicon Valley Bank. He emphasized that imprudent banking regulations can lead to systemic instabilities.
The CEO’s comments have sparked debate within the industry about the potential impact of these regulations on market dynamics and financial stability across Europe. Some experts suggest that regional regulatory pressures may lead to an increase in euro-backed stablecoins in the region.
In response to these new regulations, European exchanges like Kraken have begun restricting access to Tether (USDT). This shift could lead to a significant re-alignment of trading pairs and market preferences towards other stablecoins or fiat-backed digital assets.
Source: https://www.kanalcoin.com/tether-ceo-slams-eu-deposits/
