ChainCatcher news, according to Cointelegraph, Tether CEO Paulo Ardoino stated that the upcoming regulatory framework in Europe will bring significant banking concerns for stablecoin issuers, which could threaten the stability of the broader cryptocurrency sector.The Markets in Crypto-Assets Regulation (MiCA) is the first comprehensive regulatory framework for the crypto industry, set to come into full effect on December 30. Under MiCA, stablecoin issuers must hold at least 60% of their reserve assets in European banks.

ChainCatcher news, Circle co-founder and CEO Jeremy Allaire expressed concerns about the requirements for stablecoin companies' reserves in MiCA, stating: "Companies in our industry struggle to maintain stable relationships with banks, and MiCA actually introduces a lot of banking risks."It is reported that MiCA requires companies issuing stablecoins pegged to fiat currencies to hold 30% of their cash reserves in multiple EU bank accounts, with this ratio rising to as much as 60% for significant electronic money tokens. Some experts speculate that MiCA II regulations will follow and update the current legislation, adding more provisions regarding decentralized finance.

ChainCatcher news, venture capitalist Tim Draper, who has invested in Coinbase, Ledger, and Tezos, stated that in light of the situation during the Silicon Valley Bank collapse, startups should start using Bitcoin as a way to hedge against risks.