Paolo Ardoino, CEO di Tether, has recently expressed criticism towards the MiCA regulations of the EU, arguing that the rules on risky bank deposits compromise the security of stablecoins and limit access to the crypto market.
Let’s see all the details below.
Summary
The new MiCA regulations hinder crypto and stablecoin: the opinion of the CEO of Tether
As anticipated, the CEO of Tether, Paolo Ardoino, has criticized the upcoming regulation of the Markets in Crypto-Assets (MiCA), particularly the rule that requires stablecoin issuers to hold reserves in bank deposits.
This criticism comes as the cryptocurrency industry prepares for the implementation of these regulations on June 30, with many platforms like Binance moving their operations to Europe.
Ardoino expressed concern that the MiCA provision, which requires that 60% of stablecoin reserves be bank deposits, could complicate and make riskier the operations of stablecoins.
He also noted that the European Central Bank only insures bank deposits up to 100,000 euros. An amount therefore negligible compared to the market capitalization of stablecoins like Tether’s USDt, which stands at about 110 billion dollars.
Furthermore, Ardoino raised concerns based on recent events, such as the failure of the Silicon Valley Bank, which demonstrated the vulnerability of large uninsured bank deposits.
He indeed highlighted the risks for stablecoins like Tether’s USDT, primarily supported by US Treasury bills compared to bank deposits, extending the focus on this aspect.
According to Ardoino, in the event of a bank failure, bank deposits are protected by bankruptcy laws, which could be harmful to stablecoin issuers.
However, Tether currently invests the majority of its reserves in short-term U.S. government bonds, which are cash equivalents and can be sold immediately.
Questa strategia offre maggiore sicurezza in caso di fallimento di una banca, permettendo il recupero rapido dei titoli.
MiCA Regulation: the adaptation of the main crypto exchanges
As the deadline approaches, major cryptocurrency exchanges like Binance, OKX, and Kraken are ready to review their products in Europe.
For example, Binance announced that from June 30 it will limit the use of “unauthorized” stablecoins, in line with the implementation of MiCA regulations.
This move reflects the general trend in the crypto sector, with the exchanges preparing for the new rules by trying to minimize the impact on their European customers.
The decision of Binance to limit certain functionalities rather than completely delist some coins shows the flexibility of the exchange in responding to the changing regulatory environment.
In an interview, the CEO of Tether emphasized that the bank deposit requirement stipulated by MiCA could affect European stablecoin users.
Ardoino observed that this new regime could make stablecoins less available to European users, who are generally more sophisticated and liquid, thus threatening their stability and reliability.
According to him, it is a step backward for Europe, as it could have a negative impact on the availability and security of stablecoins for European investors and users.
