Key facts
- Circle urged the EU to revise stablecoin reserve requirements under MiCA.
- Circle wants to replace mandatory bank-deposit minimums with flexible liquidity rules.
- Circle called for removing reserve concentration limits on single sovereign exposure and counterparty deposits.
- Circle wants to preserve multi-issuance structures for stablecoins.
- MiCA currently requires e-money token issuers to hold at least 30% of reserves in commercial bank deposits, with a higher minimum of 60% for significant issuers.
Stablecoin issuer Circle has called on the European Commission to revise reserve requirements under the Markets in Crypto-Assets Regulation (MiCA). In a summary of its response to a MiCA review consultation, Circle argued that mandatory bank-deposit minimums expose issuers to credit and counterparty risks, citing its own experience in March 2023 when USDC's peg faltered after reserves were held at Silicon Valley Bank.
Circle proposed replacing the current minimum deposit requirements with a more flexible minimum asset liquidity requirement, a stance that aligns with the European Central Bank. The company also seeks the removal of concentration limits that cap exposure to a single sovereign at 35% and deposits with any single counterparty at 1.5% of that bank's total assets. Furthermore, Circle urged the preservation of multi-issuance structures, where EU-authorized and foreign-regulated entities co-issue stablecoins, warning that restrictions could drive users to offshore providers outside MiCA's regulatory framework.
Other industry groups also submitted responses to the consultation. The Hyperliquid Policy Center advocated for treating crypto perpetual futures under the existing MiFID II framework, with tailored rules and recognition of public blockchain records for transparency. The Global Blockchain Business Council recommended clearer token classification, proportionate stablecoin safeguards, and reduced overlap between MiCA and payment-services rules, while also calling for clear redemption responsibilities and an accountable EU supervisory framework for cross-border stablecoin issuance.