Circle Calls for MiCA Changes to EU Stablecoin Reserve Rules
By Tobi Opeyemi Amure
AI summary of the source article
Circle has asked the European Commission to adjust MiCA reserve rules that require e-money token issuers to keep 30% to 60% of reserve assets in commercial bank deposits, arguing this increases exposure to banking-sector credit risks. The issuer of USDC and EURC proposed replacing fixed thresholds with a flexible minimum asset liquidity requirement and removing specific sovereign and bank deposit concentration limits. Circle also reported that only three of the top 25 global stablecoins are MiCA-regulated and advocated for an equivalence regime allowing foreign-regulated issuers recognized by the European Banking Authority to access the EU market.
Why it matters
The proposed changes seek to reduce counterparty credit risks for stablecoin issuers and expand the integration of globally significant stablecoins into the European regulatory framework.
Key facts
- MiCA mandates e-money token issuers hold at least 30% of reserves in bank deposits, rising to 60% for significant tokens.
- Only three of the top 25 global stablecoins by market cap—USDC, USDG, and EURC—are currently regulated under MiCA.
- Circle proposed an equivalence model where the European Commission assesses foreign frameworks and the EBA recognizes individual issuers.