Circle Demands MiCA Revision: Stablecoin Issuers Need Redemptive Flexibility

Circle has called on the European Commission to revise its Markets in Crypto-Assets Regulation (MiCA) rules for stablecoin issuers. The company argues that the current requirement to hold at least 30% of reserves in commercial bank deposits, rising to 60% for significant tokens, exposes issuers to credit and counterparty risk.

Circle wants regulators to focus on how quickly reserve assets can be accessed for redemptions instead of fixing a percentage that must sit with banks. This position is shared by the European Central Bank and the EU's 27 national central banks, which proposed a similar model in September.

The company also opposes two further reserve restrictions: a 35% ceiling on exposure to a single sovereign and a limit capping deposits with any one bank at 1.5% of that bank's total assets. Circle argues these rules would push large issuers into relationships with dozens of banks to stay compliant.

The stakes are high, as the EU's rulebook is seen as a key battleground in the contest over which jurisdiction's stablecoins travel furthest. The Commission is expected to revise the framework in 2027, with foreign stablecoin issuers a stated focus of that overhaul.