Elena Carletti, deputy vice chair of UniCredit and head of the bank's risk committee, stated at a banking conference organized by Madrid's IESE business school that Europe may struggle to contain risks from links between crypto assets and banks in the same way U.S. authorities limited damage during the 2023 Silicon Valley Bank crisis. The concern centers on stablecoins and the reserves that back them, as stablecoin issuers typically hold deposits at banks to maintain their peg to traditional currencies. The 2023 SVB collapse held deposits backing some crypto firms, destabilized a major stablecoin, and triggered the failure of Signature Bank. U.S. authorities contained the pressure by invoking a systemic risk exception that guaranteed all deposits at the failed banks, including deposits held by crypto firms. Carletti warned that Europe may not be able to offer the same blanket protection to deposits linked to crypto firms during a similar crisis, stating "the same decision cannot be easily taken in Europe."
U.S. SVB Crisis Response and Stablecoin Stabilization
The 2023 Silicon Valley Bank collapse demonstrated how quickly connections between crypto markets and banks can create systemic stress. SVB held deposits backing some crypto firms, and its failure destabilized a major stablecoin while triggering a wave of redemptions. The shock then spread across parts of the banking system and contributed to the failure of Signature Bank. U.S. authorities invoked a systemic risk exception that guaranteed all deposits at the failed banks, including deposits held by crypto firms. That action helped stabilize markets by reducing the risk that stablecoin issuers and their customers would rush to redeem funds at the same time.
Europe's Deposit Protection Limitations
Carletti stated at the IESE conference that "the coverage and protection … was given to all deposits, including stablecoin companies, and that also allowed to maintain the stability of the stablecoin." She emphasized that "the same decision cannot be easily taken in Europe." The difference matters because crisis tools are part of market confidence. If stablecoin issuers and their banking partners believe that uninsured deposits may not receive emergency protection, stress at one bank could push issuers to move reserves quickly and users to redeem tokens. That makes Europe's position more complicated, as the region wants stablecoins and crypto service providers to operate inside a regulated financial framework, but if that framework creates strong links with banks while leaving deposit protection more limited, the system may still be vulnerable during a shock.
MiCA Reserve Requirements and Banking System Integration
The European Union's MiCA regulation requires stablecoin issuers, described under the framework as electronic money token issuers, to hold reserves in bank deposits or similar low-risk liquid assets. The rule is designed to make stablecoins safer by ensuring that tokens are backed by high-quality assets. Yet the reserve requirement also places stablecoin issuers closer to the banking system. Instead of leaving crypto firms outside traditional finance, MiCA brings them into a supervised structure where banks are central to reserve management, liquidity access, and redemption stability. Carletti described that arrangement as a weakness if it is not matched by comparable crisis protection, stating "that means that we are forcing a certain alliance of stablecoin and crypto providers with the banking sector without the possibility of extending insurance in the same way, and that to me is a double form of weakness."
Implications for Banks and Stablecoin Issuers
For European banks, the issue is not only whether they serve crypto clients, but whether stablecoin reserve deposits create new concentration, liquidity, and reputational risks. A bank that holds large deposits for crypto firms may face sudden outflows if token holders redeem aggressively or if issuers try to diversify reserves during market stress. For stablecoin issuers, the challenge is reserve resilience. Holding funds at regulated banks may satisfy rulebook requirements, but it may not fully protect issuers from bank-specific failures, deposit insurance limits, or political hesitation over extending emergency support to crypto-linked funds. The concern also affects institutional adoption, as asset managers, payment firms, and fintech platforms considering stablecoin products in Europe will need to assess not only MiCA compliance, but also banking counterparty risk and the practical limits of deposit protection.
