Why Didn’t Tether Apply for a License in Europe? CEO Reveals the Condition Behind Its Decision

Tether CEO Paolo Ardoino said the company’s decision not to apply for a MiCA license in the European Union was driven by the requirement that large stablecoin issuers hold a portion of their reserves in bank deposits.

In remarks reported by Wu Blockchain, Paolo Ardoino pointed to the rule requiring large stablecoin issuers to hold at least 60 percent of their reserves in commercial bank deposits. Tether’s explanation for not applying comes as the European Central Bank and other EU central banks have proposed removing the same requirement. Tether

The development here is not the rejection of a license application submitted by Tether; rather, Ardoino explained the reason behind the company’s decision not to apply. The central banks’ proposal, meanwhile, is reopening debate over the reserve requirement at the center of that decision.

Why do central banks want to change the same requirement?

Central banks argue that deposits held by stablecoin issuers at banks could create risks for banks because they are subject to sudden withdrawals. According to the assessment reported by the source, these funds could replace more stable retail customer deposits while creating a funding structure that is more sensitive to market conditions.

The proposed alternative would introduce liquidity requirements based on holding specific minimum portions of reserves in assets maturing within one to five business days, rather than requiring bank deposits. Thus, the debate concerns not only Tether’s licensing decision but also how stablecoin reserves should be held within the banking system.

However, this proposal is not yet an adopted rule change. Ardoino’s reported remarks also contain no commitment that Tether will apply for a license if the requirement changes.