Tether CEO Paolo Ardoino Warns ‘Many’ European Banks Will Blow Up in Next Few Years – Here’s Why
Paolo Ardoino, the chief executive of the USDT gave Tether, thinks that many European banks will “explode” in the coming years.
In a new interview with Pascal Hügli, Ardoino Blasts The regulations of the European Union Stablecoin, which they focus on increasing the systematic risk to the economy rather than the opposite.
“So remember, their regulation drives us to maintain 60% of our reserves with uncertain cash deposits in Europe. So let's do a simple mathematical calculation, right?
Imagine that you have € 10 billion in your stablecoin market cap in Europe. 60% need to be kept in uncertain cash deposits in a bank. Uncertain cash deposit means that bank insurance in Europe is only € 100,000 …
Now, in about € 6 billion, you know that the banks of Europe – well, all banks – make fractional reserves, so they can lend 90% of them to people who want to buy a home, who wants to start a business, or in public works or whatever.
So € 5.4 billion will be lent by the bank and € 600 million will keep …
So think that you have a Redemption of 20%, so you have to pay € 2 billion. You go to the bank and you say to the bank, 'Well, I want € 2 billion.'
And the bank said, 'Well, I only have € 600 million.' As a StableCoin release, you are bankrupt. Not because of you, but because of the bank. So the bank is bankrupt and you are bankrupt. “
Ardoino said the regulations were designed to bring liquidity to banks. He says that large financial institutions in Europe are not bank stablecoins, so Stablecoin issues following EU regulations will be forced to rely on smaller banks with greater risk.
According to Ardoino, the setup will lead to a banking crisis in Europe.
“Mark my words, as happened at the Silicon Valley Bank, which, by the way, almost killed them in 2023, they will deal with the same issues. Banks will explode in the next few years in Europe …
Many banks will explode in Europe over the next few years. “
https://www.youtube.com/watch?v=earixl1e7ag
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