From Yahoo Finance: 2025-05-03 11:35:00

Tether CEO Paolo Ardoino warns of potential bank failures in Europe due to risky lending and new cryptocurrency rules. European stablecoin regulations force companies like Tether to keep up to 60% of their reserves in uninsured bank deposits, potentially leaving banks vulnerable to collapses in the event of a 20% redemption event. Ardoino highlights the systemic risks posed by European banks operating on a fractional reserve system, drawing parallels to past collapses. He cautions that stablecoin issuers could go bankrupt due to bank failures, creating a dangerous situation for the financial system. The situation is exacerbated by regulations that push stablecoin issuers to use smaller banks, increasing the risk of instability.



Read more at Yahoo Finance: Tether CEO Slams EU Deposit Protections Amid Bank Failure Warnings