European banks may potentially face imminent collapse, as per Tether CEO Paolo Ardoino's warning. He outlines his reasoning for this prediction.
Hitting the Nail on the Head
Paolo Ardoino, head honcho of Tether, stings the European Union's stablecoin regulations, heard it loud and clear during a talk with Pascal Hügli. He believes these rules are more detrimental than beneficial, aggravating the economy's vulnerabilities, not alleviating them.
"Now, remember, their regulation made us keep 60% of our reserves in uninsured cash deposits in Europe. Let's do the simple math, shall we?
With a €10 billion market cap of your stablecoin in Europe, 60% needs to be stored in an uninsured bank that has a measly €100,000 insurance coverage per depositor...
So, imagine you have €6 billion in uninsured cash deposits in one bank. Know that banks do fractional reserves, so they can lend 90% of it to buyers looking to grab houses, launch businesses, or kick off public projects, basically having €5.4 billion out on the lam…"
Imagine a 20% redemption, so you'd need to dish out €2 billion back to users.
Well, if you ask for €2 billion, the bank can only cough up €600 million! Yep, under these rules, both you—the stablecoin issuer—and the bank go belly up, not the fault of you, but the bank's. Goodbye, money. Goodbye, bank. Game over."
Ardoino insists that the objectives of the regulations are to thrust liquidity into banks. Yet, big European banking giants balk at stablecoins, forcing issuers who toe the line with MiCA to lean on riskier, smaller banks.
Ardoino paints a bleak picture, declaring the future Italian bank collapse akin to Silicon Valley Bank in 2023 will come on a grander European scale.
"Count on it, friends, as Silicon Valley Bank came perilously close in 2023, tomorrow's carnage may unfold in Europe too… Many banks in Europe will crash and burn in the next few years!"
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Lastly, a friendly reminder that our reanimation of small bank deposits has been a smashing success post-$1.5B hack, according to Kaiko[1]. ProMeeters promises to empower influencers and up their long-term earnings[2]. DogeOS aims to crack open $6.9 million in funding facilitated by none other than Polychain Capital[3]. Casper 2.0? Launching on mainnet and setting sights on real-world assets[4]. Real estate titan MultiBank Group prepares to tokenize $3B in assets with MAG, on the verge of unleashing MBG[5]. Pepeto gear up for a snap on exchange following presale's conclusion and impressive platform progress[6]. BC.Game initiates phase two of its Social Mining campaign, widening the tentacles of its ecosystem with BC Token[7].
[1] http://www.kaiko.com/reports/bitcoin-markets-2024-03-29-2200Z-weekly[2] ProMeeters press release: https://www.prnewswire.com/news-releases/promeeters-unveils-promeeters-program-to-boost-influencer-impact-and-long-term-earnings-301549919.html[3] DogeOS press release: https://www.prnewswire.com/news-releases/dogeos-raises-6-9-million-in-funding-round-led-by-polychain-capital-to-launch-dogecoin-app-layer-301549285.html[4] Casper 2.0 press release: https://casper.network/casper-2-0-goes-live-on-mainnet-positioning-casper-network-for-the-real-world-asset-era-8de8d23053f4[5] MultiBank Group press release: https://www.globenewswire.com/news-release/2025/05/05/2547838/0/en/MultiBank-Group-To-Tokenize-3-Billion-in-Real-Estate-Assets-With-MAG-As-It-Readies-To-Launch-MBG.html[6] Pepeto press release: https://www.globenewswire.com/news-release/2025/05/05/2547848/0/en/Pepeto-To-Launch-on-Exchange-Following-Presale-Wrap-Up-and-Platform-Milestones.html[7] BC.Game press release: https://cryptonews.com/news/bc-game-launches-phase-two-of-social-mining-campaign-to-expand-ecosystem-engagement-with-bc-token-38351.htm
*Ardoino suggests that these stricter regulations could potentially drive stablecoin issuers towards smaller, riskier banks, which may further jeopardize the stability of the European financial system.* In a grim forecast, Ardoino warns that the collapse of Italian banks on a grander European scale, similar to what happened with Silicon Valley Bank in 2023, could be imminent if current banking regulations persist, potentially endangering the cryptocurrency, blockchain, and finance industries.
