Circle, the issuer of USDC and EURC, has urged the European Commission to revise stablecoin reserve requirements within the Markets in Crypto-Assets Regulation (MiCA). The company summarized its formal response Thursday, following the consultation's closure Wednesday.
Circle proposed replacing MiCA's mandatory bank deposit minimums with a flexible asset liquidity requirement, a position it says aligns with the European Central Bank's stance on stablecoin reserves.
Under current MiCA rules, e-money token issuers must hold at least 30 percent of reserves in commercial bank deposits—rising to 60 percent for significant issuers. Circle argues that mandatory bank deposits expose issuers to banking-sector credit and counterparty risk. The company cited its March 2023 experience: USDC temporarily lost its peg after Circle disclosed $3.3 billion in reserves at Silicon Valley Bank. U.S. authorities subsequently protected depositors and made the funds available.
Circle also called for removing the 35 percent cap on reserve exposure to a single sovereign entity and eliminating the per-counterparty deposit ceiling, currently set at 1.5 percent of that bank's total assets.
The company further urged preservation of multi-issuance models, where an EU-authorized entity and a foreign-regulated counterpart co-issue a stablecoin. Circle argued that restricting multi-issuance would push users toward offshore providers operating outside MiCA's regulatory framework.
The Hyperliquid Policy Center submitted separate recommendations, calling for crypto perpetual futures to be regulated under MiFID II, the EU's securities and derivatives framework. The group requested specific requirements tailored to perpetual futures and recognition of public blockchain records for transparency and recordkeeping obligations.
The Global Blockchain Business Council also provided feedback, recommending clearer token classification, proportionate stablecoin safeguards, and reduced duplication between MiCA and existing payment-services rules. For cross-border stablecoin issuance, the council proposed clear redemption responsibilities and enforceable reserve rebalancing mechanisms.
