Circle Pushes for MiCA Overhaul Amid Stablecoin Regulation Concerns

Circle, a prominent player in the stablecoin market, is urging European officials to revisit certain aspects of the Markets in Crypto-Assets Regulation (MiCA).

In a comment letter submitted to the European Commission on October 1, Circle pointed out that only three of the top 30 stablecoins meet the requirements set by MiCA: USDC, USDG, and EURC. The company expressed concerns that the current regulations might stifle the growth of stablecoins in Europe and drive users to unregulated foreign competitors.

Circle proposed amendments to the MiCA rules, specifically regarding cross-border stablecoin offerings and reserve requirements. The company suggested that issuers be allowed to operate in multiple jurisdictions and that the regulation should recognize stablecoins issued and regulated by other countries. This would enable European issuers to issue stablecoins in partnership with other issuers worldwide.

Circle also called for greater flexibility in reserve requirements, citing that the current rules expose e-money token issuers to risks related to banks as counterparties. The company noted that European central banks have expressed support for revising the deposit limits while maintaining other reserve requirements.