Stablecoin issuer Circle has submitted formal feedback to the European Commission, urging policymakers to accelerate updates to the bloc's digital asset framework under the proposed Market Integration Package (MIP). The company warns that delays risk slowing institutional adoption of tokenized markets and could push activity toward the United States, where on-chain market infrastructure is advancing more rapidly.
In its response, dated March 20, Circle largely supported proposed changes to the EU's Distributed Ledger Technology (DLT) Pilot Regime, which includes expanding eligible assets and raising volume thresholds. However, it argued that current limits still constrain liquidity and institutional participation. Circle proposed introducing "adaptive" thresholds tied to market conditions instead of relying on periodic legislative updates and called for a clearer path from the pilot phase to permanent rules.
A key focus of Circle's recommendations is expanding the role of MiCA-compliant stablecoins in securities settlement. While welcoming proposals to recognize e-money tokens (EMTs) for cash-leg settlement, Circle warned that limiting access to only "significant" tokens—based on market capitalization thresholds—could exclude euro-denominated stablecoins and create a "chicken-and-egg scenario that stifles their growth." The company noted that no euro-denominated EMT is currently close to reaching the required threshold, which it labeled a structural barrier to institutional participation.
Circle also advocated for allowing crypto-asset service providers, not just traditional banks and central securities depositories, to offer settlement accounts, arguing the current structure adds unnecessary friction. On supervision, Circle pushed for a narrower scope for centralized EU oversight, suggesting that ESMA's authority be limited to large, cross-border firms while smaller players remain under national regulators. The firm additionally called for clearer rules permitting stablecoins to be used as collateral.
