Originally published on: November 01, 2024
Europe’s upcoming cryptocurrency regulatory bill, known as the Markets in Crypto-Assets Regulation (MiCA), is causing a stir in the crypto industry. While seen as a step forward, the framework poses significant banking risks for stablecoin issuers, shares Tether CEO Paolo Ardoino.
Under MiCA, stablecoin issuers will soon be required to hold a minimum of 60% of reserve assets in European banks. This new requirement raises concerns as banks can lend up to 90% of their reserves, potentially introducing systemic risks for stablecoin issuers like Tether.
In a recent interview at Plan B Lugano in Switzerland, Ardoino highlighted his worries about the implications of MiCA on stablecoin stability and the broader crypto space. This regulatory development could have far-reaching consequences, impacting the industry’s future.
Meanwhile, Vitalik Buterin, Ethereum’s co-founder, has unveiled his plan to streamline the blockchain network through a project called “The Purge.” This initiative aims to reduce data bloat and simplify Ethereum’s protocol to enhance efficiency and network performance.
On a positive note, Solana has surpassed Ethereum in daily network fee generation, showing growing user activity on the third-largest blockchain globally. These developments signal a dynamic shift in the crypto landscape, with potential opportunities and challenges ahead.
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