Circle Pushes for MiCA Stablecoin Rule Revisions Amid EU Review
Circle, the issuer of USDC, is pushing for changes to the European Union's Markets in Crypto-Assets Regulation (MiCA) rules governing stablecoin reserves and banking relationships. The company wants to revise the requirements for reserve assets and concentration limits, citing that only three of the world's 25 largest stablecoins are regulated under MiCA. Circle is proposing a more flexible minimum liquidity requirement, which would place greater emphasis on the liquidity of reserve assets rather than requiring a predetermined share to be held as bank deposits.
The current MiCA rules require issuers to hold at least 30% of their reserves in commercial bank deposits, rising to 60% for issuers of stablecoins classified as significant. Circle is also seeking to remove a 1.5%-of-total-bank-assets cap per banking counterparty, which it says could require larger issuers to maintain reserve relationships with dozens of separate banks, increasing operational complexity and risk.
Circle has submitted its response to the European Commission's consultation on the MiCA review, confirming its desire for changes to the rules. The company's proposals come as the European Commission is expected to overhaul MiCA in 2027, and Circle is engaging with European policymakers and regulators as the review progresses.