Tether CEO: MiCA Regulation Poses “Systemic Risk” to Banking System

In an interview with Cointelegraph, Tether CEO Paolo Ardoino said that the EU's Market for Crypto Assets (MiCA) regulation poses a systemic risk not only to stablecoins but also to the wider banking system, Ardoino said: “My beef with MiCA is that instead of making the system more My beef with MiCA is that instead of making the system more secure, it actually creates significant systemic risk.” The MiCA regulation, which came into effect on June 30, imposes severe restrictions on stablecoin operations across the EEA. Notably, the regulation requires that at least 60 percent of the reserves backing a stablecoin must be held in EU bank accounts. Ardoino emphasized that financial institutions operate a fractional reserve banking system, whereby only a small portion of deposits are available for withdrawal at any given moment, making them vulnerable to bank runs.