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- Circle asked the European Union to revise MiCA stablecoin reserve rules to remove mandatory commercial bank deposit floors.
- Circle wants the current 30% and 60% bank deposit minimums replaced with a liquidity-based requirement.
- The European Commission will use consultation responses to prepare its MiCA review report.
Circle has asked the European Union to revise parts of MiCA governing stablecoin reserves, arguing that mandatory bank deposits can expose issuers to banking-sector credit and counterparty risk.
The USDC issuer submitted its proposals to the European Commission’s MiCA review, which closed for responses on Sept. 30. The review could lead to amendments to the bloc’s crypto rulebook.
Circle Wants 30% and 60% Bank Deposit Floors Removed
MiCA requires e-money token issuers to keep at least 30% of their reserve assets in commercial bank deposits. The requirement rises to 60% when an e-money token is classified as significant.
Circle wants those minimums replaced with a liquidity-based requirement focused on whether reserve assets can meet redemption requests rather than prescribing how much must be held at banks.
The company argues that the current structure can concentrate stablecoin reserve exposure inside the banking system.
Circle Challenges 35% Sovereign and 1.5% Bank Concentration Limits
Circle is also asking the EU to remove two concentration limits contained in European Banking Authority technical standards. One caps exposure to a single sovereign at 35% of reserves, which Circle says limits the ability of dollar stablecoins to hold most of their backing in assets such as U.S. government securities.
Another limits exposure to a single banking counterparty to 1.5% of that bank’s total assets. Circle argues that large issuers could need relationships with dozens of banks to remain below the threshold, increasing operational complexity.
Circle Wants Multi-Issuance Structure Preserved
Circle separately wants the EU to preserve multi-issuance arrangements in which an EU-authorized entity and a regulated overseas affiliate issue the same stablecoin.
The company uses that structure to bring globally circulating tokens such as USDC within MiCA’s framework and is seeking a longer-term equivalence system for qualifying foreign-regulated issuers.
The European Commission will now use consultation responses to prepare its MiCA review report. That report can be accompanied by a legislative proposal if the Commission decides changes to the framework are needed.
