Tether chief executive Paolo Ardoino is alarmed that Europe’s MiCA regulations on stablecoins, due to excessive cash reserves requirements, could pose systemic risks to banks.

Paolo Ardoino, the chief executive of the company behind the largest stablecoin by market capitalization, Tether Tether
USDT
-0.04%
Tether, appears to be concerned about the new European crypto legislation, known as MiCA (Markets in Crypto-Assets), saying it could create “systemic risks” for banks.

In an interview with Forbes, Ardoino criticized MiCA’s requirement for stablecoin issuers to hold 60% of their reserves in non-insured cash deposits, drawing parallels to Circle’s incident with Silicon Valley Bank in 2023, when over $3 billion of its $40 billion of USD Coin USDC
USDC
-0.04%
USDC reserves were stuck at the collapsed lender.

“I don’t want to endanger those 300 million people holding USDT because I have to keep the 60% in uninsured cash deposits in a European bank,” Paolo Ardoino said in the interview.