{"id":25027,"date":"2025-05-03T16:16:54","date_gmt":"2025-05-03T16:16:54","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=25027"},"modified":"2025-05-03T16:16:54","modified_gmt":"2025-05-03T16:16:54","slug":"like-spitting-on-a-fire-tether-ceo-slams-eu-deposit-protections-amid-bank-failure-warnings","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=25027","title":{"rendered":"\u2018Like Spitting on a Fire\u2019: Tether CEO Slams EU Deposit Protections Amid Bank Failure Warnings"},"content":{"rendered":"
\n

Tether CEO Paolo Ardoino is sounding the alarm on Europe\u2019s 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.<\/p>\n

Ardoino, during an interview with the Less Noise More Signal podcast, took aim at the European Union\u2019s regulatory framework for stablecoins, which he said pushes companies like Tether to keep the bulk of their reserves\u2014up to 60%\u2014in uninsured bank deposits.<\/p>\n

In his scenario, that could mean holding 6 billion euros of a 10 billion euros-pegged stablecoin in small banks with minimal protection. \u201cThe bank insurance in Europe is only 100,000 euros,\u201d he said. \u201cIf you have 1 billion euros, that\u2019s like spitting on a fire.\u201d<\/p>\n

European banks, like every other bank, operate on a fractional reserve, Ardoino added. \u201cThey can lend out 90% of it to people that want to buy a house, start a business, and all of that.\u201d In his hypothetical 6 billion euros scenario, this would mean 5.4 billion euros would be lent out by the bank.<\/p>\n

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.<\/p>\n

“As a stablecoin issuer, you go bankrupt \u2014 not because of you, but because of the bank. So the bank goes bankrupt and you go bankrupt, and the government would say, \u2018Told you so, stablecoins are very dangerous,\u201d Ardoino said.<\/p>\n

Regulations in Europe, he added, are made to try to help banks in the bloc and bring them liquidity, but this created \u201chuge systemic risk.\u201d The largest banks in Europe, like UBS, would \u201cnot bank stablecoins,\u201d pushing stablecoin issuers to use smaller banks, furthering the risk.<\/p>\n

The comments come as Tether plans to launch a U.S.-based stablecoin product,<\/a> and as the stablecoin issuer keeps investing in various projects outside of the ecosystem, having recently raised its stake in Latin American producer Adecoagro.<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Tether CEO Paolo Ardoino is sounding the alarm on Europe\u2019s 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\u2019s […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-25027","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/25027","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=25027"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/25027\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=25027"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=25027"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=25027"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}