Tether CEO Paolo Ardoino has issued a dire warning to about Europe’s financial system, predicting that “many” of the continent’s banks are at risk of catastrophic collapse.

In an interview with the Less Noise More Signal podcast, Ardoino highlighted how stringent regulations and risky banking practices could precipitate a wave of failures, drawing parallels to the collapse of Silicon Valley Bank in 2023.

Ardoino’s concerns center on the European Union’s regulatory framework for stablecoin issuers, which he argues exacerbates systemic risks rather than mitigating them. “The regulation was pushing us to keep 60% of our reserves in uninsured cash deposits in Europe,” the Tether CEO told host Pascal Hügli, describing a scenario where stablecoin issuers are forced to park billions in vulnerable bank accounts. “Imagine that you have 10 billion euros in market cap of your stablecoin in Europe. Then 60% needs to be kept in uninsured cash deposits in a bank. Uninsured cash deposit means that the bank insurance in Europe is only 100,000 euros. If you have 10 billion, 100,000 euros is like a spitting on a fire.”

Tether CEO @paoloardoino to @pahueg: “Many” European banks will “blow up” in the “next few years.” pic.twitter.com/HimWWYrbcU

— Josh Caplan (@joshdcaplan) May 1, 2025

The math, as Ardoino laid out, is grim. With 60% of a stablecoin’s reserves—equivalent to 6 billion euros in his example—held in uninsured deposits, banks’ fractional reserve practices amplify the risk. “They can lend out 90% of it to people that want to buy a house, that want to start a business, and all that,” he explained. “So 5.4 billion euros will be lent out by the bank and 600 million euros will be cut.” In the event of a 20% redemption demand, or 2 billion euros, Ardoino warned that banks would fall short of cash. “You go to the bank and you tell the bank, well, I want 2 billion euros. And the bank says, well, I only have 600 million euros.”

Ardoino predicts that the fallout would be catastrophic for stablecoin issuers. “As a stablecoin issuer, you go bankrupt. Not because of you, because of the bank,” the Tether CEO said. “So the bank goes bankrupt and you go—like, so is—I mean, and—and, oh, sure, the government will say, ah, told you so, stable coins are very dangerous.”

Ardoino’s critique extends to the broader European banking ecosystem, which he believes is ill-equipped to handle stablecoin operations. Major institutions like UBS, which he described as “systemic risk banks,” refuse to work with stablecoin issuers, forcing companies like Tether to rely on smaller, less stable financial institutions. “They need to use very small banks,” he said, warning that these institutions are particularly vulnerable. “Mark my words, as happened with Silicon Valley Bank that, by the way, almost killed them in 2033, they will face the same issues.”

“Four banks blew up last—in the last two years in the US,” he added. “Many banks will blow up in Europe in the many years—in the next few years.”

Ardoino’s comments come as Tether plans to launch a stablecoin product in the U.S. as soon as this year.

“We are just exporters of what we believe to be the best product the United States ever created — that is, the US dollar,” the Tether CEO said in an interview with CNBC.

As of April 25, Tether’s USDt solidifies its position as the leading stablecoin, securing a commanding 66% of the market, according to Cointelegraph. With a market capitalization hovering around $150 billion, per CoinGecko, USDt underscores its pivotal role in the crypto ecosystem. The Department of the Treasury’s Q1 2025 report projects a robust future for USD-pegged stablecoins, anticipating their combined market cap to soar to $2 trillion by 2028, signaling a transformative shift in digital finance, per the crypto-focus news outlet. 

Authored by Andrew Korybko via substack,

That would greatly complicate Russia’s goal of demilitarizing Ukraine and thus imperil the peace talks…

The US and Ukraine finally signed their minerals deal after amending the draft agreement to remove a proposal for Ukraine to pay back past US military aid. A clause was added though whereby future US military aid, including technology and training, is considered part of the US’ contribution to their joint fund. More weapons packages will likely be in the cards since the US now has economic stakes in Ukraine and the value of the aid that it sends to defend them can be counted toward their joint fund.

Such an arrangement imbues the US with more policymaking flexibility than if it had conceded to Ukraine’s demand for concrete security guarantees. Authorizing another weapons package at this diplomatically delicate moment in the peace process could spook Russia and thus lead to the talks’ collapse. At the same time, however, this deal will likely lead to such packages being authorized after a ceasefire on the pretext of defending US investments and contributing to their joint fund.

What this means in practice is that Russia shouldn’t expect the US to fully dump Ukraine in any realistic scenario from here on out. Trump just rewarded Zelensky for this agreement by “inform[ing] Congress of [his] intention to green-light the export of defense-related products to Ukraine through direct commercial sales (DCS) of $50 million or more” according to the Kyiv Post citing unnamed diplomatic sources. This signals his newfound interest in resuming DCS in lieu of large-scale weapons packages.

Although this sum is insignificant compared to the over $1.6 billion in DCS authorized between 2015-2023 that the Kyiv Post reminded their audience about, and nowhere near what the US Government directly provided since 2022, it still importantly hints at his calculations. If Trump comes to believe that Zelensky is responsible for the peace talks’ collapse, then he might continue to withhold weapons packages as punishment, but he could still green-light more DCS deals.

Likewise, if he comes to believe that Putin is responsible for this, then he might authorize large-scale weapons packages as punishment. Either way, US arms will likely continue flowing into Ukraine due to their amended minerals deal, with the only variables being the quality, scale, pace, and terms of these weapons shipments. This greatly complicates Russia’s goal of demilitarizing Ukraine, especially seeing as how the US will struggle to stop Europe from arming Ukraine no matter how hard the US might try.

Accordingly, Russia might calculate that it’s better to concede to Ukraine’s partial demilitarization given the difficulty of achieving its full demilitarization, but the threat that this poses could be managed by demanding a demilitarized “Trans-Dnieper” region controlled by non-Western peacekeepers. Even if that proposal isn’t agreed to, Russia might still push for geographic limits on Ukraine’s deployment of certain weapons, which would require a UNSC-approved monitoring and enforcement mechanism to work.

So long as Trump is sincere about reaching a deal with Putin, then he should agree to this compromise or a variation thereof to keep the peace process alive, otherwise Putin might find it politically impossible to approve of any agreement that entails abandoning his goal to demilitarize Ukraine. That’s essentially what’s at stake now given that the amended terms of the US’ minerals deal with Ukraine greatly complicate Russia’s attainment of this objective that’s among the reasons for its special operation.