TechFlow news, October 28 — According to Cointelegraph, Tether CEO Paolo Ardoino said the European Union’s upcoming Markets in Crypto-Assets (MiCA) regulatory framework could pose a "systemic" banking risk for stablecoin issuers.
Under MiCA rules, stablecoin issuers must hold at least 60% of their reserve assets in European banks, a requirement that could lead to broader instability in the crypto market.
Ardoino pointed out that banks can lend out up to 90% of these reserve assets, creating potential risks for stablecoin issuers. He suggested that issuers protect themselves by investing in securities to hedge against possible bank failures. The implementation of MiCA could drive smaller Web3 companies to relocate to the Middle East and result in a decline in the number of Web3 firms based in Europe.
