Circle has urged EU policymakers to revise MiCA’s stablecoin issuance and reserve rules after its EU policy director said only three of the world’s 30 largest stablecoins comply with the framework.
Summary
- Only USDC, USDG and EURC meet MiCA rules among the top 30 stablecoins, Hansen said.
- Circle wants EU regulators to preserve issuance arrangements involving European and overseas affiliates.
- The issuer supports replacing mandatory bank deposit thresholds with rules based on reserve liquidity.
- Circle’s proposal draws on the U.S. GENIUS Act’s framework for recognizing foreign stablecoin issuers.
Circle, in its Oct. 1 policy submission, called for changes covering cross-border issuance, reserve assets and recognition of foreign-regulated stablecoins. The company said Europe has authorized roughly 30 e-money tokens, but its rules still cover relatively few of the largest tokens used globally.
Patrick Hansen, Circle’s director of EU strategy and policy, said:
“only 3 of the top 30 are MiCA-compliant today”
Hansen identified USDC, USDG and EURC. Circle’s accompanying policy post compared the top 25 stablecoins by market capitalization rather than the top 30, while naming the same three compliant tokens.
Circle wants MiCA to preserve cross-border issuance
Under the arrangement Circle wants to retain, a licensed European entity can issue a stablecoin alongside an affiliated issuer operating in another jurisdiction. Circle argued that restricting such arrangements could send European users toward offshore providers rather than bring their activity under EU supervision.
For the company, the issue concerns access to existing global stablecoins as well as the creation of new European tokens. Circle said MiCA has already produced a regulated issuer base, while many of the most widely used stablecoins remain outside its framework.
In defending the model, Circle cited the European Commission’s 2020 impact assessment, which warned that excluding foreign stablecoins could encourage purchases from offshore parties without MiCA protections. Its submission also proposed safeguards allowing reserves to be rebalanced between European and global issuance.
Circle’s own European business has expanded under the existing rules. As crypto.news reported on Aug. 18, EURC passed €400 million in circulation after its supply more than doubled over the preceding year. The report cited Circle’s figures showing €402.4 million outstanding on Aug. 13.
According to that report, Circle issues EURC through its licensed French electronic money institution, with reserves separated from corporate funds and subject to monthly third-party attestations. Eligible Circle Mint customers can redeem the token directly for euros at a one-to-one rate.
In its August update, the issuer attributed EURC’s growth partly to distribution across exchanges, payment providers and institutional platforms. Circle said the token was being used for payments, foreign exchange, treasury operations and settlement, alongside cryptocurrency trading.
MiCA reserve changes would replace fixed deposit thresholds
On reserves, Circle asked policymakers to reconsider requirements that e-money token issuers keep at least 30% of backing assets in commercial bank deposits. For issuers classified as significant, the required share rises to 60%.
The company argued that mandatory deposits increase exposure to banks’ credit and counterparty risks. Rather than retain fixed percentages, Circle supported an approach based on the liquidity of reserve assets and their availability to meet redemptions.
European central banks made a related request in their own consultation response. A Sep. 22 report on their reserve rule proposals said the European System of Central Banks favored removing the minimum deposit requirements while retaining liquidity safeguards. The report described proposed liquidity requirements covering periods of one to five days.
Beyond deposit thresholds, Circle challenged two reserve concentration limits introduced through European Banking Authority technical standards. Its submission questioned a 35% ceiling on exposure to a single sovereign issuer and a limit tying deposits at each banking counterparty to 1.5% of that bank’s total assets.
According to Circle, the sovereign limit restricts dollar-token issuers’ use of government-backed liquid assets. The banking limit, it argued, could require large issuers to maintain relationships with dozens of banks, adding operational complexity.
Foreign stablecoin recognition would draw on U.S. rules
For longer-term access, Circle proposed a separate recognition route for foreign-regulated stablecoins. Under its plan, an issuer would remain primarily supervised in its home jurisdiction and distribute tokens in Europe through a locally licensed institution.
The proposed process would combine a European Commission assessment of the foreign regulatory framework with an EBA decision recognizing the individual issuer. Circle also supported reciprocal arrangements allowing European-issued stablecoins to circulate internationally.
For U.S. readers, the proposal has a direct policy connection: Circle cited the GENIUS Act’s foreign-issuer framework as one model for European recognition.
Under Section 18 of the U.S. law, foreign payment stablecoin issuers seeking the statutory exception must operate under a supervisory regime that Treasury determines is comparable to the American framework. They must also register with the Office of the Comptroller of the Currency.
The legislation requires qualifying foreign issuers to hold reserves at a U.S. financial institution sufficient to meet American customers’ liquidity demands, unless a reciprocal arrangement permits otherwise. Registered issuers must accept U.S. enforcement jurisdiction and comply with reporting, supervision and examination requirements set by the OCC.
Hyperliquid seeks derivatives treatment for perpetual futures
Separately, Hyperliquid Policy Center used the MiCA review to request clarity on perpetual futures. An Oct. 1 report covered its EU derivatives submission, which urged regulators to classify products by their economic features rather than their use of blockchain technology.
The policy center argued that perpetual futures should remain subject to MiFID II because they are derivatives, regardless of how transactions are recorded. It also opposed applying restrictions designed for bilateral contracts for difference to markets using transparent central limit order books.
On reporting obligations, Hyperliquid asked regulators to recognize information already available through public blockchain records.
