Tether CEO “Europe's MiCA, A Risk To Stablecoins”

Paolo Ardoino Tether CEO (Source: X)

Paolo Ardoino, the Chief Executive Officer (CEO) of Tether, which issues the world's largest stablecoin, USDT, expressed strong concerns about MiCA, the European Union's cryptocurrency asset regulation. He stated that Tether's decision not to register USDT with MiCA could pose significant risks not only to stablecoins but also to the European small banking system.

Ardoino revealed this in an interview with Cointelegraph during the Token2049 event held in Dubai on the 1st. He stated, "Regulations are necessary, but European companies are actually feeling fear about 'compliance,'" and drew a line that there are no plans to register Tether under current MiCA regulations. This has led to mentions of the possibility that several exchanges in Europe might delist USDT.

Indeed, changes have been detected in the European market following the implementation of MiCA regulations. The US-based cryptocurrency exchange Kraken delisted five stablecoins, including USDT, and Crypto.com also announced plans to delist ten stablecoins.

Ardoino particularly focused on MiCA's requirements for reserves. According to regulations, stablecoin issuers must deposit 60% of reserves in European banks and hold them in cash form with depositor protection. He warned that such measures are placing a significant burden on European small banks and "could lead to the risk of bankruptcy within a few years."

He continued, "The reason we decided not to register with MiCA is to protect more than 400 million users worldwide. They are not as fortunate as Europe," adding, "I love Europe, but I cannot shake the impression that the European Central Bank is trying to control consumption through the digital euro."

MiCA officially came into effect last December, and cryptocurrency companies providing services within Europe must comply with this regulation. Tether, a company based in El Salvador, must meet MiCA requirements to operate in the European market.