TL;DR
- Circle submitted its response to the European Commission’s MiCA consultation, questioning current reserve requirements.
- The company proposes preserving multi-issuance and creating an equivalence regime for stablecoins regulated outside the European Union.
- MiCA requires that at least 30% of reserves be held in commercial bank deposits, a threshold that rises to 60% for significant issuers.
Circle, the issuer of the stablecoin USDC, submitted its formal response to the European Commission’s targeted consultation on the MiCA regulation review. The company has operated for two years as an authorized issuer under that regulatory framework and issues both USDC, denominated in dollars, and EURC, denominated in euros, both authorized as electronic money tokens.
According to the document, approximately 30 electronic money tokens are currently authorized under MiCA. However, of the 25 largest stablecoins in the world by market capitalization, only three are regulated under that framework: USDC, USDG, and EURC. Circle’s response identifies the limitations of the framework in accommodating tokens at greater scale and in allowing those issued in the EU to operate at an international level.
The company defends the preservation of multi-issuance, a mechanism that allows a globally circulating stablecoin to be co-issued by an entity authorized under MiCA alongside its regulated counterpart abroad. Circle argues that this is currently the only structure that allows that global liquidity to operate within the European regulatory perimeter. The company also recommends formalizing existing safeguards, such as dynamic rebalancing between global and EU-specific reserves.
🇪🇺 We submitted feedback to the European Commission’s MiCA Review Consultation
As the largest MiCA-regulated e-money token (EMT) issuer for both the dollar (@USDC) and the euro (EURC), and having been the first major global issuer to comply back in July 2024, @circle knows… pic.twitter.com/YvEME8czAr
— Patrick Hansen (@paddi_hansen) October 1, 2026
The Reserve Problem and Circle’s Proposal
On the matter of reserves, Circle’s analysis points directly to the heart of the debate. MiCA requires that issuers maintain at least 30% of their reserve assets in commercial bank deposits, a threshold that rises to 60% for those classified as significant issuers. Circle warns that this requirement increases exposure to credit and counterparty risk within the banking sector.
The company agrees with the European Central Bank that the mandatory deposit minimum should be replaced by a less rigid liquid asset requirement.
Additionally, it calls for eliminating two concentration rules from the European Banking Authority’s Level 2 technical standards: the 35% exposure cap to a single sovereign, which prevents issuers of non-European currencies from holding primarily high-quality sovereign assets, and the 1.5% limit of total bank assets per counterparty, which would force larger issuers to multiply their banking relationships, increasing operational complexity.
For the long term, Circle proposes an equivalence and recognition regime for stablecoins regulated outside the EU, based on existing frameworks such as EMIR, CSDR, and MiFIR, and on the U.S. equivalent regime under the GENIUS Act.
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