Circle is pressing European regulators to open the Markets in Crypto-Assets Regulation to qualifying foreign stablecoin issuers and to replace mandatory bank-deposit reserve thresholds with broader liquidity standards.
In its Oct. 1 response to the European Commission’s MiCA review, Circle proposed a recognition regime: the Commission would first determine whether a foreign jurisdiction's rules are equivalent to EU standards, then the European Banking Authority would recognize individual issuers. Those issuers would remain primarily supervised at home while distributing tokens through locally licensed EU institutions.
Circle highlighted that only USDC, USDG and EURC among the world's 25 largest stablecoins by market value are currently MiCA-regulated, despite about 30 e-money tokens obtaining authorization. The company also urged the EU to preserve multi-issuance, where a MiCA-authorized European entity co-issues a global stablecoin with a foreign-regulated counterpart, warning that restricting the model could push European users toward offshore platforms outside MiCA protections.
On reserves, Circle challenged the requirement that e-money token issuers keep at least 30% of reserves in commercial-bank deposits, rising to 60% for significant tokens. It wants a broader liquidity standard instead, arguing forced bank deposits increase credit and counterparty risk. Tether CEO Paolo Ardoino has made similar warnings, saying Tether declined an EU license because of the bank-reserve mandate. Circle also wants removal of a 35% single-sovereign exposure cap and a 1.5% per-bank deposit limit, which it says can prevent dollar stablecoins from relying on high-quality sovereign securities.
However, the EBA has urged stricter treatment of third-country multi-issuer structures, and the European Systemic Risk Board recommended in September 2025 that MiCA be interpreted as not permitting such schemes unless a dedicated safeguard framework is created. The Commission’s consultation closed Sept. 30, so any changes remain subject to legislative review.
In a related disclosure, Circle's European redemption policy allows temporary delays if reserves cannot be rebalanced between Circle France and Circle Internet Financial LLC. The policy, dated Sept. 15, 2026, defines a Stress Event and permits Circle to adjust redemption processing, including deferring execution beyond ordinary timing. Authorized crypto-asset service providers may face temporary redemption caps based on previously reported holdings, while other EEA holders may have redemptions restricted to holdings verified as originating within the EEA before the stress began. Circle said no active reserve-transfer failure was identified as of Oct. 4, but the terms show how cross-border liquidity frictions could affect access to issuer cash even while par-value claims continue.
