"Tether CEO Warns: European Digital Asset Rules Threaten Stablecoins"

# Tether CEO Highlights Risks of EU's MiCA Framework to Stablecoins and Banking Sector Tether CEO Paolo Ardoino has raised significant concerns regarding the European Union’s Markets in Crypto-Assets (MiCA) regulatory framework, warning that it poses substantial risks to stablecoins like USDT and the European banking system. In an interview with Cointelegraph on October 1 at the Token2049 Conference in Dubai, Ardoino elaborated on why Tether chose not to register USDT, its primary stablecoin pegged to the U.S. dollar, under MiCA regulations. Ardoino justified Tether’s stance by highlighting the regulatory risks of the framework. He asserted that despite the potential for non-compliance with MiCA regulations, the company would persist in its decision not to register. He also mentioned that European exchanges could eventually delist USDT due to compliance complications. Ardoino stressed that while crypto firms should strive to adhere to regulatory guidelines, companies in Europe are becoming increasingly wary of conforming to such regulations. # The Impact of MiCA on Banking and Stablecoin Ecosystems “MiCA licensing presents considerable risks to stablecoins and even greater dangers to Europe’s smaller banking institutions,” Ardoino commented. He noted that MiCA’s requirements—like maintaining 60% of stablecoin reserves in cash deposits insured by EU banks—might render banks vulnerable to failures within a few years. Such stringent provisions could endanger the European financial ecosystem, particularly for smaller banks. “We decided not to apply for a MiCA license to protect over 400 million users worldwide,” Ardoino remarked. “Not every region enjoys Europe's level of prosperity. Although we admire Europe, the European Central Bank (ECB) seems more focused on promoting the digital euro, which could have significant implications for consumer control and spending oversight.” MiCA officially came into effect in December 2024, mandating that stablecoin issuers like Tether comply with its regulations before offering products or services across EU member states. Since the regulations were enforced, major exchanges such as Kraken have delisted five stablecoins, including USDT, while Crypto.com has planned to delist ten stablecoins to adhere to MiCA requirements. # Expanding Bitcoin Holdings and Global Reserve Strategies Discussing operations in the United States, Ardoino noted that the country may require specialized products to rival local stablecoin issuers. He also emphasized that nations, including the U.S., are progressively moving towards increasing their Bitcoin(BTC) reserves. “Over time, as Bitcoin education expands, more businesses will set an example, encouraging others to follow. It's never too late to invest in Bitcoin,” Ardoino declared. On the same day, Tether disclosed that its exposure to U.S. Treasury bills had reached an estimated $120 billion as of Q1 2025. USDT currently holds a substantial market share within the stablecoin sector, with a market capitalization of approximately $149 billion, cementing its position as the dominant player in the space. Stay tuned as the implementation of MiCA regulations and the ongoing discussion on cryptocurrency reserves continue to influence the industry’s direction.