Circle has asked EU regulators to rewrite parts of MiCA's stablecoin rules after its policy director said only three of the world's top 30 stablecoins currently comply with the framework. The company's Oct. 1 submission targets cross-border issuance, reserve requirements, and recognition of foreign-regulated tokens.
Circle has urged EU policymakers to revise MiCA's stablecoin issuance and reserve rules after its EU policy director said only three of the top 30 stablecoins comply with the framework. Patrick Hansen, Circle's director of EU strategy and policy, identified the compliant tokens as USDC, USDG and EURC.
According to a post on X: "only 3 of the top 30 are MiCA-compliant today" (Hansen said).
Circle wants to keep cross-border issuance intact
Circle's Oct. 1 policy submission calls 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, yet its rules still cover relatively few of the largest tokens used globally.
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 push European users toward offshore providers instead of bringing their activity under EU supervision, citing the European Commission's 2020 impact assessment on the same risk.
Reserve rules would shift from fixed deposits to liquidity
Circle also asked regulators to reconsider requirements that e-money token issuers keep at least 30% of backing assets in commercial bank deposits, a share that rises to 60% for issuers classified as significant. The company argued mandatory deposits increase exposure to banks' credit and counterparty risks, and it backed an approach based on reserve-asset liquidity instead of fixed percentages.
A Sept. 22 report said the European System of Central Banks favored removing the minimum deposit requirements while retaining liquidity safeguards covering one to five days. Circle separately challenged two European Banking Authority limits: a 35% ceiling on exposure to a single sovereign issuer, and a cap tying deposits at each bank to 1.5% of that bank's total assets.
Foreign recognition proposal borrows from the GENIUS Act
For longer-term access, Circle proposed a separate recognition route for foreign-regulated stablecoins, under which an issuer would stay primarily supervised in its home jurisdiction while distributing tokens in Europe through a locally licensed institution. The process would combine a European Commission assessment of the foreign framework with an EBA decision recognizing the individual issuer.
Circle cited the U.S. GENIUS Act's foreign-issuer framework as one model, under which qualifying issuers must operate under a supervisory regime Treasury deems comparable, register with the Office of the Comptroller of the Currency, and hold reserves at a U.S. institution to meet American customers' liquidity demands.
Separately, the Hyperliquid Policy Center used the same MiCA review to ask regulators to classify perpetual futures by their economic features rather than by their use of blockchain technology, arguing the products should remain subject to MiFID II as derivatives.
Source: Circle, crypto.news
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