Circle urges EU to loosen MiCA bank reserve rules and recognize foreign stablecoins
Stablecoin issuer Circle has pushed the European Commission to reform its Markets in Crypto-Assets regulation by replacing mandatory commercial-bank deposit floors with broader liquidity standards and allowing foreign-regulated stablecoins into the bloc.
Circle has called on the European Union to adjust its Markets in Crypto-Assets (MiCA) framework in response to the European Commission's review consultation. The USDC issuer argued that existing mandates and concentration caps keep the vast majority of the global market outside Europe's perimeter, pointing out that only three of the world's 25 largest stablecoins—USDC, USDG, and EURC—are currently regulated under MiCA, even though roughly 30 e-money tokens have achieved authorization.[7][1][3][4]
Under MiCA, e-money token issuers must hold at least 30% of their reserves in commercial-bank deposits, a quota that increases to 60% for tokens designated as significant. Circle proposed replacing this requirement with a flexible liquidity standard, siding with the European Central Bank and arguing that mandatory bank deposits expose issuers to commercial bank credit and counterparty risks. The position mirrors warnings previously voiced by Tether Chief Executive Officer Paolo Ardoino, who noted last month that Tether declined an EU license over the bank reserve requirement. Circle also asked the EU to lift a 35% cap on single-sovereign exposures and eliminate a rule capping deposits with any single lender at 1.5% of that bank's total assets.[7][2][3][4][6]
Beyond reserve standards, Circle recommended an equivalence recognition framework where the European Commission evaluates foreign regulatory regimes and the European Banking Authority (EBA) recognizes individual overseas issuers, allowing them to distribute tokens in Europe without full EU authorization. Circle also urged officials to preserve multi-issuance structures, where an EU entity co-issues a global stablecoin alongside a foreign entity. The European Commission's consultation closed Sept. 30, and while the EBA recently cautioned about regulatory blind spots in third-country multi-issuer models, no MiCA rules have yet changed.[7][1][2]
Key facts
- Circle submitted proposals to the European Commission's MiCA review consultation advocating to scrap mandatory commercial-bank deposit floors for stablecoin reserves.
- MiCA mandates that e-money token issuers maintain 30% of reserves in bank deposits, rising to 60% for significant tokens.
- According to Circle, only three of the top 25 stablecoins by market capitalization—USDC, USDG, and EURC—are currently regulated under MiCA, despite roughly 30 e-money tokens securing authorization.
- Circle proposed a recognition regime letting the European Commission assess foreign equivalence and the European Banking Authority recognize individual foreign-regulated issuers who remain supervised at home.
- Circle urged the EU to retain multi-issuance models and remove both the 35% single-sovereign exposure cap and the 1.5% bank asset deposit ceiling.
- Tether CEO Paolo Ardoino made matching criticisms regarding bank deposit rules and cited them for Tether's refusal to pursue an EU license.
- The European Commission's MiCA consultation closed on Sept. 30, and no regulatory rules have changed.
Sources · 7 sources
- BC
Bitcoin.com News@BitcoinNewsPost on X ·
NEW: 🔵 Circle submitted its response this week to the EU's MiCA Review, pushing to scrap the 30% bank deposit floor for stablecoin reserves and preserve multi-issuance. 🇪🇺 Only 3 of the top 25 stablecoins are currently MiCA-regulated: USDC, USDG, and EURC. 💶 https://t.co/Z70D1OKWo3
Open source - CR
CryptoSlate@CryptoSlatePost on X ·
MiCA requires e-money token issuers to keep at least 30% of reserves in bank deposits, or 60% for significant tokens. Circle wants that replaced with broader liquidity standards. Tether's CEO has made the same criticism. No rules have changed. https://t.co/QfrBCy5E25
Open source - DE
DecryptArticle ·
Circle Pushes Back on MiCA's Bank-Deposit Mandate for Stablecoins The USDC issuer told the European Commission that MiCA's reserve mandates and concentration caps keep the largest global stablecoins outside Europe's perimeter—siding with the ECB in calling for more flexible rules.
Open source - CB
Coin Bureau@coinbureauPost on X ·
🇪🇺NEW: Stablecoin giant Circle is PUSHING BACK on Europe's crypto rules. The $74B USDC issuer says ONLY 3 of the world's 25 biggest stablecoins are regulated under MiCA, keeping the largest ones outside Europe's regulatory reach. It wants the EU to replace the requirement that issuers hold 30% to 60% of reserves in bank deposits with a more flexible liquidity rule, siding with the European Central Bank. Circle also wants to scrap limits that it says would force large issuers to spread reserves across dozens of banks. The EU is expected to overhaul MiCA in 2027.
Open source - BS
BSCN@BSCNewsPost on X ·
Circle wants Europe to loosen its stablecoin reserve rules @circle answered the European Commission's review of MiCA, the EU crypto rulebook, today. The $USDC issuer wants to swap the rule requiring issuers to keep at least 30% of reserves in bank deposits for a looser liquidity test, siding with the ECB. Circle also backs keeping multi-issuance, where one global coin is issued by both EU and foreign entities. Only three of the top 25 stablecoins fall under MiCA today, per Circle.
Open source - CO
CoinMarketCap@CoinMarketCapPost on X ·
LATEST: 🇪🇺 Circle urged the European Commission to change MiCA's reserve rules, saying mandatory bank deposits expose stablecoin issuers to bank credit and counterparty risks. https://t.co/cXfPC8QGD9
Open source - CR
CryptoSlateArticle ·
Circle and Tether find common ground against MiCA’s bank reserve rules Circle is urging the European Union to open its Markets in Crypto-Assets Regulation (MiCA) to foreign-regulated stablecoins and loosen reserve rules that constrain global issuers. The USDC issuer proposed a recognition regime that could let qualifying overseas stablecoin companies distribute tokens in Europe without becoming fully authorized EU issuers, as part of a broader push to bring more of the global market inside the bloc’s regulatory perimeter. Circle said only three of the world’s 25 largest stablecoins by market value, USDC , USDG and EURC , are currently regulated under MiCA, despite roughly 30 e-money tokens securing authorization since the framework took effect. Under its proposal, the European Commission would first determine whether a foreign jurisdiction’s regulatory regime is equivalent to EU standards. The European Banking Authority (EBA) would then recognize individual issuers, which would remain primarily supervised in their home countries while distributing tokens through locally licensed institutions. That would create an alternative to current MiCA rules, which generally require e-money token issuers seeking public distribution or trading in the bloc to obtain EU authorization. Circle also wants regulators to preserve multi-issuance, where a MiCA-authorized European entity co-issues a globally circulating stablecoin with a foreign-regulated counterpart. The company said restricting that structure risks pushing European users toward offshore platforms and tokens outside MiCA’s protections. MiCA stablecoin bank reserve rule draws wider opposition Circle is also challenging a requirement that e-money token issuers keep at least 30% of reserves in commercial-bank deposits, rising to 60% for tokens classified as significant. It wants the requirement replaced with a broader liquidity standard, arguing mandatory deposits increase issuers’ exposure to bank credit and counterparty risk. That argument echoes criticism previously made by Tether Chief Executive Officer Paolo Ardoino , who warned that forcing large stablecoin issuers to place substantial reserves in banks could create systemic vulnerabilities if those institutions failed or could not meet large withdrawals. Ardoino said last month that Tether declined to seek an EU license because of the same requirement. The overlap is notable because Circle chose to comply with MiCA while Tether kept USDT outside the framework . Both now argue that requiring stablecoin issuers to concentrate liquidity in commercial banks can introduce risks regulators are seeking to contain. Circle also wants the EU to remove a 35% cap on exposure to a single sovereign and a rule limiting deposits with an individual bank to 1.5% of that lender’s total assets. It said the restrictions can prevent dollar stablecoins from relying heavily on high-quality sovereign securities and force large issuers to spread reserves across dozens of banks. Related Reading How MiCA brings banks closer to controlling Europe’s stablecoin access Yet regulators are considering tighter controls elsewhere. The EBA last month urged the Commission to strengthen MiCA against risks arising from third-country multi-issuer stablecoin structures, warning that reserves, redemptions and other critical functions can sit beyond effective EU supervision. The Commission’s MiCA review consultation closed Sept. 30, and its findings could lead to legislative amendments. Circle’s recognition proposal therefore offers no immediate route into Europe: foreign issuers remain subject to the existing framework while Brussels decides whether opening MiCA to more global liquidity is worth loosening some of the barriers that kept it out. The post Circle and Tether find common ground against MiCA’s bank reserve rules appeared first on CryptoSlate .
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