Tether CEO: MiCA regulation poses systemic risks to the banking system

ChainCatcher news, according to Cointelegraph, Tether CEO Paolo Ardoino stated that the recently approved Markets in Crypto-Assets Regulation (MiCA) by the EU poses not only a threat to stablecoins but also a systemic risk to the entire banking system.

In an interview, Ardoino pointed out that MiCA requires at least 60% of stablecoin reserves to be held in EU bank accounts, a regulation that could increase systemic risk. He emphasized that banks operate under a fractional reserve system, making them vulnerable to runs, and mentioned the 2023 Silicon Valley Bank collapse as a warning, believing that this regulation could adversely affect large-scale stablecoin issuers.