Tether CEO Paolo Ardoino has confirmed that the company deliberately chose not to seek European Union authorization for USDT under the Markets in Crypto-Assets regulation (MiCA), citing concerns over the framework's bank-deposit reserve requirements. The decision represents a significant development for the world's largest stablecoin issuer and reignites a long-running debate over how stablecoin reserves should be managed.
Ardoino has repeatedly argued that complying with MiCA would make USDT less safe by forcing a substantial portion of its reserves away from highly liquid government securities and into commercial banks. Under MiCA's Article 54, issuers of qualifying e-money tokens must keep at least 30% of funds in separate accounts at credit institutions, with more stringent requirements for significant tokens producing the 60% bank-deposit requirement at the center of Tether's criticism.
The Tether CEO contends that bank deposits are not equivalent to immediately available cash. Using a hypothetical €10 billion stablecoin subject to the 60% requirement, Ardoino explained that €6 billion could be deposited with banks, which could then use those funds for lending. This exposes stablecoin issuers to liquidity or counterparty risk if large numbers of holders demand redemption during periods of banking stress. Tether instead holds a substantial portion of USDT's backing in short-term U.S. Treasury securities and other highly liquid assets, which Ardoino argues gives the company greater control over liquidity during large redemption events.
The commercial consequences in Europe have been significant. USDT has been removed or restricted by several regulated trading platforms seeking MiCA compliance, while rival stablecoin issuers have pursued European authorization. Tether has nevertheless maintained an indirect presence in the region—in August 2025, the company invested in Spanish crypto platform Bit2Me, which had obtained authorization from Spain's CNMV as a MiCA crypto-asset service provider with passporting rights across the EU.
On September 22, the regulatory debate took an unexpected turn when the European Central Bank and EU national central banks recommended eliminating MiCA's mandatory minimum bank-deposit requirement for stablecoin reserves. Instead, they favor liquidity requirements under which issuers would hold sufficient assets capable of maturing within roughly one to five working days. Their concern partly mirrors Tether's argument, though from a different perspective: European central banks warn that requiring stablecoin issuers to place large reserves in commercial banks could replace relatively stable retail deposits with much larger and potentially volatile deposits from stablecoin companies. A sudden wave of stablecoin redemptions could then force issuers to withdraw billions from banks quickly, potentially transmitting stress into the banking system.
The proposal does not mean MiCA's reserve rule has already changed—existing legal requirements remain in force unless European lawmakers amend the regulation. Still, the timing is notable for Tether. After years of arguing that MiCA's bank-deposit requirement could create the very systemic risks regulators intended to prevent, Europe's own central banks are now asking policymakers to reconsider that part of the framework. Whether this ultimately changes Tether's decision not to seek MiCA authorization remains unresolved.
