Circle Pushes Back on MiCA’s Bank-Deposit Mandate for Stablecoins

Circle is pushing the European Union to rework parts of its crypto rulebook, arguing that the current rules governing stablecoins are keeping the world’s biggest tokens outside Europe’s regulatory perimeter.

The stablecoin issuer said Thursday it had submitted a response to the European Commission’s consultation on reviewing the Markets in Crypto-Assets Regulation, or MiCA, the bloc’s comprehensive framework for digital assets.

Circle, which issues the dollar-pegged USDC and the euro-pegged EURC, framed its recommendations as refinements to a framework it credits with giving Europe an early lead.

The company’s core argument is that MiCA has produced plenty of regulated issuers but failed to capture the largest global tokens. Of the top 25 stablecoins by market value, Circle noted, only three are MiCA-regulated.

To close that gap, it urged the Commission to preserve “multi-issuance,” the structure that lets a globally circulating stablecoin be co-issued by an EU-authorized entity alongside its foreign-regulated counterpart, warning that restricting it would simply push activity offshore.

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Circle’s most pointed requests concern reserves. MiCA currently requires e-money token issuers to hold at least 30% of reserves in commercial bank deposits, rising to 60% for tokens deemed “significant.”

Circle argued that the mandate actually increases exposure to banking-sector credit risk, and sided with the European Central Bank in calling for it to be replaced with a more flexible liquidity requirement. The firm also asked regulators to scrap a 35% cap on single-sovereign exposure and a rule limiting how much it can hold at any one bank, which it said would force large issuers to spread reserves across dozens of banks.

The submission lands as the EU prepares a broader MiCA overhaul. Brussels is expected to revise the framework in 2027 to better address foreign stablecoin issuers, even as European crypto firms navigate the squeeze of MiCA’s transition period and regulators press platforms like Binance over compliance.

The push also reflects a wider contest over stablecoin dominance, as U.S. issuers expand abroad and Washington increasingly frames dollar-pegged tokens as a tool to extend the greenback’s global reach.