Circle Pushes Back on EU Stablecoin Rules, Warns of Offshore Activity

Circle, issuer of the USDC and EURC stablecoins, has submitted recommendations to the European Commission's review of the Markets in Crypto-Assets Regulation (MiCA). The company argues that while MiCA has led to an early regulatory lead for Europe, it has failed to capture the largest global tokens. Only three out of the top 25 stablecoins by market value are MiCA-regulated.

Circle is urging the Commission to preserve 'multi-issuance', a structure that allows globally circulating stablecoins to be co-issued by an EU-authorized entity alongside their foreign-regulated counterpart. The company warns that restricting this would push activity offshore, rather than attracting more issuers to Europe.

The submission also concerns reserve requirements under MiCA, which currently mandate at least 30% of reserves in commercial bank deposits for e-money token issuers, rising to 60% for significant tokens. Circle argues that this increases exposure to banking-sector credit risk and sides with the European Central Bank in calling for a more flexible liquidity requirement.

The push comes ahead of a broader MiCA overhaul in 2027, which will address foreign stablecoin issuers. The contest over stablecoin dominance is also reflected in the submission, as U.S. issuers expand abroad and Washington frames dollar-pegged tokens as a tool to extend the greenback's global reach.