Tether deliberately chose not to seek European Union authorization for USDT under the Markets in Crypto-Assets regulation because of its bank-deposit requirements, CEO Paolo Ardoino says, putting the stablecoin giant’s long-running objection back in focus as European central banks now push to change the rule.

Ardoino has repeatedly argued that complying with MiCA would make USDT less safe by forcing a large portion of its reserves away from highly liquid government securities and into commercial banks. He said Tether decided against applying because it did not want to expose its global users to that additional banking risk. The dispute centers on MiCA’s reserve requirements. Article 54 requires issuers of qualifying e-money tokens to keep at least 30% of funds received in separate accounts at credit institutions, with the remainder invested in secure, low-risk and highly liquid assets. More stringent requirements can apply to significant tokens, producing the 60% bank-deposit requirement at the center of Tether’s criticism.

Ardoino Says Bank Deposits Create Redemption Risk

Ardoino’s argument is that a bank deposit is not equivalent to immediately available cash. He has used the example of a hypothetical €10 billion stablecoin subject to the 60% requirement. That could require €6 billion to be deposited with banks. Those institutions can then use deposits to fund lending, meaning the stablecoin issuer could face liquidity or counterparty risk if large numbers of holders demand redemption during banking stress. Tether instead holds a substantial portion of USDT’s backing in short-term U.S. Treasury securities and other highly liquid assets. Ardoino has argued that directly holding Treasury bills gives Tether greater control over liquidity during large redemption events than placing most reserves with commercial banks.

The company’s position has carried commercial consequences in Europe. USDT has been removed or restricted by several regulated trading platforms seeking compliance with MiCA, while rival issuers have pursued European authorization. Tether has nevertheless maintained a presence in the region indirectly. In August 2025, it 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.