Circle urges EU to scrap MiCA bank-deposit rule for stablecoin reserves

Circle, the issuer of the U.S. dollar stablecoin USDC, has asked the European Union to change the reserve rules in its crypto law, the Markets in Crypto-Assets Regulation (MiCA). In a blog post on Oct. 1, Circle said it had submitted a response to the European Commission's targeted consultation on the review of MiCA, calling for the removal of the requirement to hold 30% to 60% of reserves in bank deposits and for the preservation of a structure in which EU and non-EU entities co-issue the same token. The European Central Bank (ECB) and EU national central banks, which filed their own response earlier, agreed on dropping the deposit requirement but said multi-issuance involving a non-EU issuer could only be allowed through a change in the law.

Only three of the top 25 stablecoins fall under MiCA

MiCA, adopted by the EU in 2023, classifies stablecoins tied to a single official currency as e-money tokens (EMTs) and sets licensing and reserve rules for their issuers. Circle issues both USDC and its euro stablecoin EURC under MiCA authorisation.

Circle said roughly 30 e-money tokens are now authorised under MiCA, more than any comparable framework has produced elsewhere in a similar timeframe. But only three of the top 25 stablecoins by market capitalisation, USDC, USDG and EURC, are MiCA-regulated, and Circle said the gap lies not in the supply of new regulated issuers but in MiCA's perimeter capturing the largest global tokens. The blog post presenting the submission was written by Patrick Hansen, Circle's director of EU strategy and policy.

Aligned on reserves, split on offshore co-issuance

The ESCB, made up of the ECB and the national central banks of EU member states, submitted its response to the same consultation in September. It warned that in a run, EU reserve assets could be used to meet redemption requests from holders of tokens issued outside the EU, and that EU issuers may not have enough reserves to meet redemptions from both EU and non-EU holders. It also flagged that technically identical tokens may give rise to different claims depending on the issuing entity. The European Systemic Risk Board (ESRB) issued a recommendation on third-country multi-issuer schemes on Sept. 25, 2025, and the ESCB said it supports all of the ESRB's recommendations.

The starting point for the proposed liquidity rule is a draft regulatory technical standard prepared by the European Banking Authority (EBA). The draft requires significant stablecoins to keep at least 40% of reserves maturing within one day and at least 60% within five days, with 20% and 30% for tokens that are not significant.

A rule that keeps dollar tokens from holding Treasuries

Circle also asked for the removal of two concentration rules introduced through the EBA's Level 2 technical standards. It said a 35% cap on single-sovereign exposure makes it impossible for issuers of non-EU currency tokens, such as dollar tokens, to hold primarily sovereign high-quality liquid assets in their reserves. A cap limiting deposits at any one bank to 1.5% of that bank's total assets would force larger issuers to keep reserve relationships with dozens of banks, increasing operational complexity and risk, Circle said.

For the longer term, Circle proposed an equivalence and recognition regime for foreign-regulated stablecoins. Under the two-tier process, the Commission would determine whether a foreign regime is equivalent and the EBA would recognise the issuer, with primary supervision staying in the home jurisdiction and EU distribution going through a locally licensed institution. Circle cited the EU's existing equivalence frameworks under EMIR, CSDR and MiFIR and the U.S. GENIUS Act's equivalence regime for foreign payment stablecoins as models. The ESCB said that if third-country multi-issuance is permitted, it would at a minimum require a robust EU-level equivalence assessment and mechanisms allowing reserve assets to be transferred across entities during periods of stress.

USDC and EURC both trade against the won on Upbit

All three MiCA-regulated tokens are listed in Korean won markets. At around 5:30 p.m. KST on Oct. 3, USDC traded at 1,360 won on South Korean exchange Upbit, USDG at 1,354 won and EURC at 1,531 won. Upbit's 24-hour trading value at the same time was about 1.39 billion won for USDC and about 120 million won for EURC, far below about 113.5 billion won for Tether (USDT).

The Commission said in its consultation document that responses will feed into its report under Articles 140 and 142 of MiCA and could, if considered appropriate, lead to a formal proposal to amend the regulation. The document asked separately whether the 30% to 60% deposit requirement is appropriate and what risks multi-issuance poses.