Circle has formally asked European regulators to revise the stablecoin reserve requirements under the Markets in Crypto-Assets Regulation, known as MiCA. The company submitted its response as part of the European Commission’s targeted consultation, which closed on September 30. Circle, the issuer of USDC and EURC, said it has operated as an authorized MiCA e-money token issuer since July 2024 and is currently the largest MiCA-regulated issuer of both dollar- and euro-denominated stablecoins.
In its response, Circle warned that MiCA’s current requirement to hold at least 30% of reserves in commercial bank deposits — rising to 60% for issuers classified as significant — increases credit and counterparty risk. The company pointed to the March 2023 USDC depeg, when $3.3 billion of reserves were temporarily stuck at Silicon Valley Bank. Circle proposed replacing the fixed bank deposit floor with a liquidity-based rule and said the European Central Bank shares a similar view, suggesting instead that a portion of reserves mature within one to five working days.
Circle also called for eliminating two concentration limits from the European Banking Authority’s Level 2 technical standards: a 35% cap on exposure to a single sovereign and a 1.5% limit on exposure to any individual bank’s total assets. The company argued these rules make it harder for issuers of non-European currency stablecoins to hold high-quality sovereign assets and force larger issuers to manage unnecessary banking relationships. Circle further defended the preservation of multi-issuance, allowing a MiCA-licensed entity to issue a stablecoin alongside a foreign affiliate under one global brand, and proposed an equivalence regime for stablecoins regulated outside the EU based on frameworks such as EMIR, CSDR, MiFIR and the U.S. GENIUS Act.
Circle noted that only three of the world’s largest stablecoins — USDC, USDG and EURC — currently meet MiCA standards. Separately, the Hyperliquid Policy Center submitted feedback asking EU regulators to classify perpetual futures under MiFID II rather than MiCA, arguing that perps should be judged by their economic features and that existing derivatives rules already cover them. The European Commission has not yet set a timeline for next steps following the review.
