‘Like Spitting on a Fire’: Tether CEO Slams EU Deposit Protections Amid Bank Failure Warnings
By: coindesk|2025/05/03 16:15:02
0
Share
Tether CEO Paolo Ardoino is sounding the alarm on Europe’s financial system, warning that a wave of bank failures could hit the continent in the near future due to the intersection of risky lending and new cryptocurrency rules. Ardoino, during an interview with the Less Noise More Signal podcast, took aim at the European Union’s regulatory framework for stablecoins, which he said pushes companies like Tether to keep the bulk of their reserves—up to 60%—in uninsured bank deposits. In his scenario, that could mean holding 6 billion euros of a 10 billion euros-pegged stablecoin in small banks with minimal protection. “The bank insurance in Europe is only 100,000 euros,” he said. “If you have 1 billion euros, that’s like spitting on a fire.” European banks, like every other bank, operate on a fractional reserve, Ardoino added. “They can lend out 90% of it to people that want to buy a house, start a business, and all of that.” In his hypothetical 6 billion euros scenario, this would mean 5.4 billion euros would be lent out by the bank. He likened the setup to the lead-up to Silicon Valley Bank's collapse in 2023, when a flood of redemptions exposed the mismatch between deposits and actual liquidity. Ardoino warned that European banks operate under similar fractional reserve models that could unravel under pressure. A 20% redemption event, he estimated, could leave banks short billions. "As a stablecoin issuer, you go bankrupt — not because of you, but because of the bank. So the bank goes bankrupt and you go bankrupt, and the government would say, ‘Told you so, stablecoins are very dangerous,” Ardoino said. Regulations in Europe, he added, are made to try to help banks in the bloc and bring them liquidity, but this created “huge systemic risk.” The largest banks in Europe, like UBS, would “not bank stablecoins,” pushing stablecoin issuers to use smaller banks, furthering the risk. The comments come as Tether plans to launch a U.S.-based stablecoin product, and as the stablecoin issuer keeps investing in various projects outside of the ecosystem, having recently raised its stake in Latin American producer Adecoagro.
You may also like
'Bottom building in progress': Analysts say bitcoin holder capitulation signals late-stage bear market
A Comprehensive Analysis: Starting from 1996, Who is Laying the Foundation for the Next Generation of Capital Markets
Luke Dashjr, the Biggest Anti-Spammer of Bitcoin, Inscribed Phrases on the Network in 2011
Whales bought 270,000 BTC while ETFs bled $7 billion. One side is wrong
The crypto IPO class of 2025-26 is down as much as 89%. Autopsy of a listing boom
Robinhood Chain Mining Guide: A Comprehensive Tutorial from Cross-Chain to Memecoin
BitGo CEO says single-digit percentages of bitcoin's supply are 'probably right' for large holders amid Strategy's sale
Beyond Private Keys: How to Safeguard the Security Boundaries of Web3 from Wallets, L2 to Supply Chains?
Vanguard Enters the Market, Opening a New Crypto Gateway for 50 Million Traditional Investors
Why the OUSD Alliance of 150 Companies Still Cannot Shake USDT and USDC?
Citigroup Analysis: Is There Still 47% Upside for Nvidia? Can Rubin and CPO Deliver?
WEEX API Fast Connect: Turn Every Sign-In Into a Live Trader in Under 10 Seconds
WEEX API Fast Connect is a one-click OAuth authorization system that lets your users link their WEEX account without ever touching an API key. Frictionless onboarding, faster conversions, higher retention — built for WEEX Broker partners.
Bitcoin's dwindling exchange reserves don't pack the same bullish punch anymore
From Le Mans to the Rollercoaster: Carl Moon Takes On Portimão
Crypto world renowned KOL and racing driver Carl Moon, backed by WEEX, heads to the Ferrari Challenge Portugal round at the Algarve International Circuit, July 16–19, fresh off a podium finish at Le Mans. Here's why this race is one to watch.
Fast execution. Split-second accuracy. Security that never blinks. That's WEEX — and that's exactly how Carl races.
The Downfall of a Public Company: A $1.46 Billion Bet on WLFI, $540 Million Went to the Trump Family
Dragonfly Partner: BTC is Intergenerational Wealth, Optimistic About ETH and SOL
Goldman Sachs Calls to Go Long on Chinese AI: $4 Trillion Market Value Behind, Global Funds Only Allocated 1.2%
The New Landscape of Cryptocurrency in Europe: Why Germany Takes Center Stage?
'Bottom building in progress': Analysts say bitcoin holder capitulation signals late-stage bear market
A Comprehensive Analysis: Starting from 1996, Who is Laying the Foundation for the Next Generation of Capital Markets
Luke Dashjr, the Biggest Anti-Spammer of Bitcoin, Inscribed Phrases on the Network in 2011
Whales bought 270,000 BTC while ETFs bled $7 billion. One side is wrong
The crypto IPO class of 2025-26 is down as much as 89%. Autopsy of a listing boom
Robinhood Chain Mining Guide: A Comprehensive Tutorial from Cross-Chain to Memecoin
Customer Support:@weikecs
Business Cooperation:@weikecs
Quant Trading & MM:bd@weex.com
VIP Program:support@weex.com
