Tether Co-Founder on Who Really Wins the Crypto War

**William Quigley** (0:00)
It was the single biggest, I think, strategic blunder he's made. He's made a lot of great decisions. I would say even launching the metaverse, that the downside of that would have been swept under the rug had he launched a stable coin.

**Jon Gillan** (0:17)
Micah is pushing crypto out of Europe. The Clarity Act is stalled on the finish line. Bitcoin is back over 65K. Is all of this government regulation going to drive people back into permissionless assets or is centralized control the future for all of us? Hello and welcome to The Milk Road Show, the podcast that knows that crypto legislation sounds great until you read the fine print.
I'm your host, Jon Gillan. Today is Wednesday, July 15th, and today we are joined by William Quigley. William is a pioneering cryptocurrency entrepreneur and investor best known as the co-founder of Tether and as the co-founder of Wax, a purpose-built NFTs and gaming blockchain. Will was an early investor in Coinbase, Kraken, and over 30 other projects in crypto. He's going to give us a ton of Alpha today and we're going to unpack some things that neither one of us had thought about until now.
So that all sounds good to you. Make sure you like and subscribe, share this episode with somebody who's going to enjoy it. Today's episode is brought to you by BitGet, stocks 2 with real liquidity, real dividends and Securitize, the regulated rails for tokenization. And without further ado, welcome back to The Milk Road Show. William, how are you, sir?

**William Quigley** (1:19)
Doing good, thanks.

**Jon Gillan** (1:21)
William, I'm excited to have you here and as the co-founder of Tether, I thought it would be interesting to get your thoughts on some of the recent developments we've seen with regulation in Europe around crypto, around digital assets overall. Tether and Binance and several other players have left the European Union in response to this MICA law that's come out. And I'm curious your reaction to this news and what you think this means for the future of crypto in Europe and more broadly.

**William Quigley** (1:44)
Sure.
Well, I would say in an ideal world, Tether would be available as well as the other stable coins would be available anywhere in the world, wherever you are, because tokenized fiat is such an amazing way to do payments, to settle especially cross-border payments. But every jurisdiction wants to impose its will on the companies that operate in their jurisdiction. And in this case, I can't say MICA, the regulations surrounding things like stable coins and crypto. You can't say it was sprung upon us. This has been in the works for probably five years.
The first draft, I think, was available in 2023 So we've seen it coming. But in the case of Tether, the reason I think Tether has decided not to comply with MICA and therefore has decided to withdraw, is mainly around the way it would have to reorganize its reserve math in order to be compliant with MICA. Because just for one high level thing, the MICA legislation would require Tether to have 60 percent of its reserves in EU banks.
That wouldn't work for a whole bunch of reasons with the way Tether is currently run. In addition, if it was going to do that, I'd say it would be willing to do it if that was the only market Tether operates in. But the vast majority of Tether liquidity and Tether trading occurs outside of the EU. The EU has never really been as important in crypto as either the US or Asia. So for Tether, it would come down to basically an economic decision. Does it comply with the rules of Micah, but greatly lower its own economics? Or does it simply withdraw? And there's a whole bunch of details in there and things Tether could do, you know, Tether could, of course. Well, why doesn't Tether just operate a subsidiary? And there's, we can talk about that. Why maybe it wouldn't want to at this point. So it's not a surprise that it withdrew.
It was a business decision to do it. I think that EU crypto customers are much worse off not having Tether. But at the moment, that's the reality they have to deal with. Now I should also point out, it's not illegal to hold Tether, even post this MICA legislation. You can still hold Tether. You can self-custody Tether. But it's just EU regulated exchanges can't trade it because they can only trade MICA compliance stablecoins.

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