Circle Seeks Changes to EU Stablecoin Reserve Rules
Circle said fixed deposit thresholds expose issuers to bank risk and could limit access to liquid assets needed for redemptions.
- Circle urged the European Commission on Thursday to replace mandatory bank-deposit requirements for stablecoin reserves with flexible liquidity rules, arguing current Markets in Crypto-Assets Regulation rules expose issuers to banking-sector credit and counterparty risks.
- Citing its 2023 experience when USDC temporarily lost its dollar peg after $3.3 billion in reserves were held at the failed Silicon Valley Bank, Circle warned that forced bank deposits create systemic vulnerabilities. The issuer proposed prioritizing asset liquidity over fixed deposit percentages.
- Regarding cross-border operations, Circle asked the Commission to preserve "multi-issuance" models, where European Union-authorized entities and foreign-regulated counterparts jointly issue stablecoins. This structure maintains fungibility while operating through regulated entities in different jurisdictions.
- European central banks echoed these concerns in their own consultation response, suggesting regulators prioritize minimum proportions of reserve assets that mature within one to five days. Large stablecoin withdrawals can place significant pressure on commercial lenders, they noted.
- Separately, the Hyperliquid Policy Center petitioned regulators to classify crypto perpetual futures under the Markets in Financial Instruments Directive , arguing requirements should reflect derivatives' economic features rather than underlying blockchain technology.
26 Articles
26 Articles
Circle urges MiCA changes as only 3 of top 30 stablecoins comply
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. Circle, in its Oct. 1 policy submission, called for…
Circle Asks EU To Drop MiCA Bank-deposit Rule For Stablecoins
BitcoinWorld Circle asks EU to drop MiCA bank-deposit rule for stablecoins Circle has asked the European Commission to rewrite the reserve rules at the centre of the EU’s Markets in Crypto-Assets Regulation, telling Brussels that a fixed bank-deposit mandate… This post Circle asks EU to drop MiCA bank-deposit rule for stablecoins first appeared on BitcoinWorld.
Latest Circle urges EU to revise stablecoin reserve rules in MiCA review in Cryptocurrency
Stablecoin issuer Circle urged the European Commission to revise reserve requirements in its response to a consultation on reviewing the Markets in Crypto-Assets Regulation (MiCA). In Thursday’s summary of its response, the USDC and EURC issuer said mandatory bank-deposit requirements expose stablecoin issuers to banking-sector credit and counterparty risks. Circle faced those risks firsthand in
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.
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