Circle has formally asked the European Commission to overhaul how stablecoin issuers are required to hold reserves under the Markets in Crypto-Assets regulation, arguing that fixed bank-deposit ratios should give way to a liquidity-based test. The request, submitted on October 1, lands a day after the Commission's public consultation on MiCA closed on September 30.
Under the current rules, issuers of so-called ordinary tokens must hold 30% of reserves as bank deposits, rising to 60% for tokens designated as significant. Circle wants those fixed percentages replaced with what the company describes, in its own words, as a "requisito di liquidità minima degli asset meno rigido" — a less rigid minimum liquidity requirement for the underlying assets.
The company is also asking Brussels to remove two caps imposed by the European Banking Authority: a 35% limit on exposure to any single sovereign issuer and a 1.5% limit on deposits held at any single bank. Circle argues these thresholds constrain how reserves can be managed without necessarily improving the safety of the underlying stablecoin.
Central banks flag the same rules, propose a different fix
Circle's intervention follows a separate submission from the European System of Central Banks, which responded to the same consultation in September and also took issue with the fixed deposit ratios. Rather than a liquidity test, the ESCB has proposed reserve maturity windows of one to five business days as an alternative to the current percentage-based approach.
The two proposals converge on dissatisfaction with MiCA's current fixed thresholds but diverge on the remedy: Circle wants a liquidity standard tied to asset quality, while the central banks favour a maturity-based mechanism tied to how quickly reserves can be accessed.
Context for euro and dollar stablecoins
The request carries particular weight for Circle's euro-denominated stablecoin. Since July 2024, EURC has been issued solely by Circle's France-based entity, after that unit became a second issuer of USDC alongside Circle's US operations earlier the same month. Any change to MiCA's reserve architecture would therefore bear directly on how Circle structures both its euro and dollar-pegged tokens within the EU.
The submissions, reported by The Defiant, leave the Commission weighing input from both the industry's largest regulated stablecoin issuer and the bloc's monetary authorities, each pointing to the same provisions as in need of revision but pulling toward different technical fixes. No timeline for any legislative response has been indicated.
