ChainCatcher news, according to Cointelegraph, Tether CEO Paolo Ardoino stated that the recently approved Markets in Crypto-Assets Regulation (MiCA) by the EU poses not only a threat to stablecoins but also a systemic risk to the entire banking system.In an interview, Ardoino pointed out that MiCA requires at least 60% of stablecoin reserves to be held in EU bank accounts, a regulation that could increase systemic risk. He emphasized that banks operate under a fractional reserve system, making them vulnerable to runs, and mentioned the 2023 Silicon Valley Bank collapse as a warning, believing that this regulation could adversely affect large-scale stablecoin issuers.

ChainCatcher news, former Coinbase CTO Balaji Srinivasan tweeted that Google and Apple pose systemic risks to the crypto industry. If the U.S. federal government weaponizes them, it could exploit backdoors in iPhone and Android to leak private keys.Balaji pointed out that if future governments go bankrupt and turn to Bitcoin to fund their operations, the U.S. government might force tech giants like Apple and Google to search for private keys on their controlled servers, browsers, and devices. Most tech companies would be compelled to comply with the regulations, as they would have no choice. He stated that the only safe option for crypto users is the Linux operating system, even though it has limitations. (Source link)

ChainCatcher News, the U.S. top financial regulatory agency has proposed to strengthen the tools used to review non-bank companies, including modifications to the guidelines established during the Trump administration. U.S. Treasury Secretary Yellen announced a proposal from the Financial Stability Oversight Council (FSOC) that will change the way non-bank institutions are designated as systemically important. Yellen stated, "The existing guidance was issued in 2019 and set inappropriate barriers in the designation process."She noted that such a designation process could take up to six years to complete, which is impractical and could hinder the council's ability to act on new risks to financial stability before it is too late. Yellen's remarks signify a long-awaited shift in the Biden administration's scrutiny of large non-bank institutions. Areas that may be under review include insurance companies, private equity firms, hedge funds, mutual fund companies, and emerging industries such as cryptocurrency. (Source link)

ChainCatcher news, International Monetary Fund (IMF) Vice President Bo Li calls for more action on regulation in the crypto industry to avoid the destabilizing effects of cryptocurrencies on banks and traditional financial institutions. Nobuyasu Sugimoto, Deputy Director of the IMF's Financial Regulation Division, and IMF Vice President Bo Li believe that, given the increasing ties between traditional finance and cryptocurrencies, the volatility of cryptocurrencies could pose systemic risks to the existing financial system.The IMF blog post points out that developed economies are also vulnerable to the financial stability risks posed by cryptocurrencies, as institutional investors were attracted by higher returns in the previous low-interest-rate environment, increasing their holdings of stablecoins. (source link)

Recently, the Federal Reserve's research institution published two new papers exploring the regulatory issues of the crypto ecosystem and its related impacts on the traditional financial system. The papers point out that, under appropriate circumstances, supervision, requirements for increased transparency, and capital and liquidity requirements can enhance the resilience of entities within the digital asset ecosystem. Currently, centralized trading platforms are often not subject to these conditions.Furthermore, regarding systemic risk, the conclusion states that although the crypto ecosystem is prone to "financial loopholes," it currently does not pose a systemic risk because the digital asset ecosystem does not provide core financial services and has limited connections to the traditional financial system. (Source link)