Circle urges EU to change MiCA as only 3 of top 30 stablecoins comply

What happened

Circle has asked EU policymakers to change the parts of MiCA that cover stablecoin issuance and reserves. The request came after the company's EU policy chief said only three of the 30 biggest stablecoins follow the framework. Circle filed its policy submission on Oct. 1, covering cross-border issuance, reserve assets and recognition of stablecoins regulated abroad.

Patrick Hansen, Circle's director of EU strategy and policy, said in the submission that only 3 of the top 30 stablecoins are MiCA-compliant today. He named USDC, USDG and EURC as the tokens that meet the rules. A policy post that went with the submission compared the top 25 stablecoins by market capitalization instead of the top 30, but listed the same three tokens.

Circle said MiCA has created a regulated issuer base in Europe, yet many of the most widely used stablecoins still sit outside it. The issuer wants the EU to keep an arrangement in which a licensed European company can issue a stablecoin next to an affiliate licensed in another jurisdiction.

Why it matters

Circle argued that restricting those cross-border arrangements could push European users toward providers based outside the bloc. In the company's view, that would leave the activity beyond EU supervision.

On reserves, Circle wants policymakers to reconsider a rule that e-money token issuers hold at least 30% of their backing assets in commercial bank deposits. For significant issuers, that share rises to 60%. Circle said mandatory deposits raise exposure to bank credit and counterparty risk, and it backed a liquidity-based rule that weighs the quality and availability of reserve assets.

The company has agreed with the European Central Bank that those thresholds are too strict and may lift the risk of banking counterparty exposure.

What the data shows

Europe has authorized roughly 30 e-money tokens, according to Circle, yet the framework still covers a small share of the largest tokens used worldwide. Circle's own euro stablecoin has grown under the rules: EURC supply more than doubled year over year to approximately €400 million, and Circle figures showed €402.4 million outstanding on Aug. 13.

Background

Circle pointed to the European Commission's 2020 impact assessment, which warned that leaving out foreign stablecoins could push buyers toward offshore parties without MiCA protections.

Circle issues EURC through a licensed French electronic money institution, with reserves held apart from corporate funds and checked in monthly third-party attestations, according to an earlier crypto.news report. Circle's submission landed alongside other responses to the Commission's MiCA consultation, including one from the Hyperliquid Policy Committee on perpetual futures, which argued that such products stay under MiFID II as derivatives. Revolut has also launched EURR, another euro stablecoin, in Europe's regulated market.

What is still unclear

• It is not clear whether EU regulators will drop the fixed deposit thresholds in favor of the liquidity-based approach Circle backs.
• The reports do not say whether the EU will keep the cross-border issuance model Circle wants to retain.

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