Tether CEO Criticizes MiCA as a ‘Gift to Banks’

The current draft of the MiCA law in the EU is described as a “massive gift” to the traditional banking system, according to Paolo Diomede from The Graph.

MiCA is nothing but a massive gift to the traditional banking system. Forcing stablecoin issuers to hold >30% of their liquidity in banks only ensures more profits for the legacy players. It’s regulation designed to benefit the old system, not innovation.

Once again, the… pic.twitter.com/RN1S9Si0Ut

— Paolo Diomede ?‍? (@pdiomede) December 27, 2024

His tweet was reposted by Tether CEO Paolo Ardoino.

Diomede noted that the rules require stablecoin issuers to hold more than 30% of their liquidity in banks, while financial institutions have a reserve requirement of only 1%.

“This regulation is designed to benefit the old system, not innovation. Once again, the European Commission, the European Parliament, and the entire EU demonstrate what they do best: zero innovation and endless useless rules. A doomed continent led by clueless bureaucrats,” wrote the expert.

In August, Ardoino criticized MiCA, stating that the law creates a “systemic risk” not only for stablecoins but also for the banking system itself.

As of December 30, Coinbase has restricted access to USDT for European users due to the new regulations coming into effect. Other major exchanges do not plan to delist Tether’s stablecoin in the short term, noted JAN3 CEO Samson Mow.  

Other than Coinbase (who is invested in Circle) no other exchange has plans to delist USDt in the short term for European users. Local European regulators have a grace period of more than 12 months.

For the FUDsters, which exchanges have announced the delisting of USDt for… pic.twitter.com/Mtvyx5Exij

— Samson Mow (@Excellion) December 29, 2024

Most EU countries have introduced a grace period of 12-18 months, allowing gradual adaptation to regulatory requirements. Only the largest American platform, which is an investor in Tether’s main competitor Circle, decided to cease support for USDT, Mow emphasized.

Ardoino also noted his opinion.

Circle, the company behind USDC, in October secured a license Electronic Money Institution to issue stablecoins in compliance with MiCA.

In November, Tether decided to discontinue support for the euro-based stablecoin EURT. In the EU, the company will focus on supporting third-party projects that comply with regulatory rules and promoting the Hadron asset tokenization platform.

Earlier, Tether invested in European stablecoin issuers Quantoz and StablR as part of a new strategy on the continent.