Circle Pushes MiCA Overhaul as Just 3 of Top 30 Stablecoins Meet EU Rules
Circle has urged the European Commission to overhaul the Markets in Crypto-Assets Regulation, pointing out that only three of the top 30 stablecoins currently comply with EU rules and proposing adjustments to reserve and cross-border standards.
Circle is calling on European authorities to modify several elements of the Markets in Crypto-Assets Regulation regarding stablecoins. In an Oct. 1 comment letter addressed to the European Commission, Circle pointed out that a significant portion of the largest stablecoins by market capitalization currently operate outside the scope of the regulation.
Circle put forward multiple proposed amendments concerning cross-border stablecoin distributions, reserved assets, and stablecoins that are overseen outside of Europe.
According to Patrick Hansen, Circle’s director of EU strategy and policy, only three out of the 30 most popular stablecoins comply with MiCA standards: USDC, USDG, and EURC. While roughly 30 e-money tokens have received approval in Europe, other prominent stablecoins fail to meet MiCA criteria.
Circle Pushes to Preserve Cross-Border Stablecoin Issuance
A central worry involves issuers that function across multiple regions. Circle aims to stop regulations from hindering European issuers from collaborating with global partners to release stablecoins. Without changes, European users might abandon regulated domestic companies in favor of foreign alternatives.
Additionally, Circle proposed methods for recognizing stablecoins that are issued and supervised by foreign nations. These frameworks would let issuers remain primarily regulated in their home jurisdictions while distributing tokens within Europe via entities regulated locally in Europe. The Commission would evaluate the regulatory frameworks of other countries as part of the EBA’s assessment of the stablecoin issuer.
The firm cited the US GENIUS Act as a potential reference point. Provisions within the GENIUS Act require that comparable laws, regulations, registrations, reserves, and other supervisory measures apply to qualifying foreign issuers.
Read More: What MiCA Still Doesn’t Solve — Europe’s Biggest Crypto Regulation Problems
Circle has expanded its European footprint following the rollout of MiCA. EURC issuance surpassed €400 million in August, doubling its volume from the prior year. Circle issues EURC through a regulated French electronic money institution, keeping EURC reserves segregated from its corporate assets and audited on a monthly basis by third parties.
MiCA Reserve Rules Face Calls for Greater Flexibility
Circle is also encouraging regulators to reevaluate MiCA rules that mandate e-money token issuers to keep at least 30% of reserves in bank deposits, a figure that rises to 60% for significant tokens. Circle contends that mandatory bank deposits expose issuers to counterparty risks associated with banks.
By contrast, Circle permits reserve requirements tied specifically to redemptions. European central banks have voiced support for adjusting deposit caps while keeping other reserve mandates intact.
Web3 PR Specialist | KOL | Blockchain Advocate | Digital Strategy Expert based in Moscow, Russia. Focused on Web3 communications, blockchain, digital strategy, and community growth.
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