Circle Asks EU to Rework MiCA Stablecoin Reserve Rules

Circle has urged the European Commission to change MiCA’s reserve rules in its reply to the regulation’s review consultation, which closed Wednesday. The issuer of USDC and EURC argues that mandatory bank-deposit requirements expose stablecoin companies to banking sector credit and counterparty risk. It knows the danger firsthand: in March 2023, USDC briefly lost its dollar peg after Circle revealed $3.3 billion of its reserves sat at Silicon Valley Bank. Those funds were later freed after US authorities protected the bank’s depositors.

Proposed Changes to Deposit Minimums and Concentration Limits

Under MiCA, e-money token issuers must keep at least 30% of reserves in commercial bank deposits, rising to 60% for significant issuers. Circle wants these minimums replaced with a flexible asset liquidity requirement, a view shared by the European Central Bank. It also wants two concentration limits scrapped: a 35% cap on exposure to a single sovereign, and a deposit ceiling per bank equal to 1.5% of that bank’s total assets.

Multi-Issuance and Offshore Risk

Circle also asked the Commission to keep multi-issuance, where an EU-authorized entity and a foreign-regulated partner co-issue a stablecoin. Limiting it, Circle warned, would push users toward offshore providers outside MiCA’s protections.

Other Industry Groups Respond to the MiCA Consultation

The Hyperliquid Policy Center urged treating crypto perpetual futures under MiFID II, with tailored rules and recognition of blockchain records for transparency duties. The Global Blockchain Business Council asked for clearer token classification, proportionate stablecoin safeguards, less overlap with payment-services rules, and clear redemption responsibilities for cross-border issuance.