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Tether CEO: The EU's stablecoin regulatory framework may trigger a wave of local bank closures.
CoinVoice has recently learned that according to a report by CoinDesk, Tether CEO Paolo Ardoino criticized the European Union's stablecoin regulatory framework during an interview with the Less Noise More Signal podcast. This framework forces stablecoin companies like Tether to hold a significant portion of their reserves (up to 60%) in unprotected bank deposits. Due to the cross-impact of high-risk loans and new cryptocurrency regulations, Europe could soon face a wave of bank failures.
Paolo Ardoino added that the European regulatory framework is designed to assist banking institutions in the Eurozone by providing more liquidity, but this has led to "huge systemic risks" because major European banks like UBS are not incorporating stablecoins into the banking system, ultimately forcing stablecoin issuers to choose smaller banks, which further exacerbates the risks.