Paolo Ardoino was really going off on the EU rules that might make stablecoin issuers depend on sketchy banks and even warned about possible bank failures down the road. It was May 3, 2025, at 3:35 p.m. when Tether CEO Paolo Ardoino dropped some truth bombs about Europe’s financial system during an interview on the Less Noise More Signal podcast. He basically said that a bunch of banks in Europe could go bust soon due to a mix of dodgy loans and new crypto regulations.
Ardoino wasn’t holding back when he criticized the EU’s regulations for stablecoins. He pointed out that these rules force companies like Tether to stash most of their reserves—up to 60%—in uninsured bank accounts. Imagine having 6 billion euros out of a 10 billion euros-pegged stablecoin sitting in little banks with barely any protection. That’s a disaster waiting to happen. “The bank insurance in Europe is only 100,000 euros,” Ardoino noted. “If you have 1 billion euros, that’s like spitting on a fire.”
According to Ardoino, European banks work on a fractional reserve system, just like every other bank out there. They lend out most of the money people deposit to help folks buy homes, start businesses, and all that jazz. So, in his hypothetical scenario with 6 billion euros, the bank would lend out a whopping 5.4 billion euros. That’s a lot of cash flying around.
He drew parallels to Silicon Valley Bank’s meltdown in 2023, where a bunch of withdrawals exposed the gap between deposits and actual cash on hand. Ardoino warned that European banks operate similarly and could crumble under pressure. If just 20% of people tried to cash out, it could leave banks billions in the hole.
But here’s where things get really messy. Ardoino pointed out that if you’re a stablecoin issuer, you could go belly up—not because of anything you did, but because of the bank. The bank tanks, you tank, and the government swoops in to say, “See, we told you stablecoins were trouble.” It’s a lose-lose situation.
He also mentioned how European regulations are supposed to help banks in the region by providing liquidity, but they’re actually creating a huge risk to the whole system. Big banks like UBS won’t touch stablecoins with a ten-foot pole, so stablecoin issuers have to rely on smaller banks, making the whole thing even riskier.
All of this drama is unfolding as Tether gears up to launch a stablecoin product in the U.S. and keeps throwing money at projects left and right. Just recently, they upped their stake in a Latin American producer called Adecoagro. It seems like Tether is making moves, but with the financial system on thin ice, who knows what could happen next?
Francisco Rodrigues, the writer of this article, has a thing for cryptocurrencies and personal finance. Before landing at this gig, he wrote for some big financial and crypto publications. Oh, and he’s got some bitcoin, ether, solana, and PAXG in his wallet, all above CoinDesk’s $1,000 limit.
So, yeah, things are getting pretty heated in the world of stablecoins and banks. Ardoino’s warnings are definitely something to think about, but who knows if anyone will actually listen before it’s too late.
