Tether CEO: The EU's stablecoin regulatory framework may trigger a wave of bank failures locally

ChainCatcher news, according to CoinDesk, Tether CEO Paolo Ardoino criticized the EU's stablecoin regulatory framework during an interview on the Less Noise More Signal podcast. This framework forces stablecoin companies like Tether to keep a significant portion of their reserves (up to 60%) in uninsured bank deposits. Due to the interplay of high-risk loans and new cryptocurrency regulations, Europe may soon face a wave of bank failures.

Paolo Ardoino added that the European regulatory system is designed to assist banking institutions in the eurozone by providing more liquidity, but it has resulted in "huge systemic risks," as large European banks like UBS will not incorporate stablecoins into the banking system, ultimately forcing stablecoin issuers to choose smaller banks, thereby further exacerbating the risks.