Tether CEO: EU's Stablecoin Regulatory Framework May Trigger a Wave of Local Bank Closures

Tether CEO Paolo Ardoino criticized the EU's stablecoin regulatory framework in an interview with the Less Noise More Signal podcast. The framework forces stablecoin companies like Tether to keep most of their reserves (up to 60%) in uninsured bank deposits. Due to the combined impact of high-risk loans and new cryptocurrency rules, Europe may soon face a wave of bank failures. Paolo Ardoino added that the European regulatory system aims to help eurozone banking institutions by bringing more liquidity, but this has created a "huge systemic risk" because large European banks like UBS will not integrate stablecoins into the banking system, ultimately forcing stablecoin issuers to choose smaller banks, further exacerbating the risk.