Circle Responds to the European Commission’s Proposed Market Integration Package

On March 20, 2026, Circle submitted feedback to the European Commission regarding its legislative package for the further development of capital markets integration and supervision within the EU, also known as the Market Integration Package (MIP). 

We commend the Commission’s proposals as a meaningful step toward a digitally enabled financial system. Our response highlights areas where further refinement will help to ensure the EU remains at the forefront of capital markets innovation.

In summary, our feedback focuses on four key pillars:

1. Reforming the DLT Pilot Regime

Circle supports the direction of the proposed reforms, including the expansion in scope of the DLT Pilot Regime and the proposed increase in volume thresholds. However, to foster true institutional adoption, we recommend:

• Incorporating adaptive thresholds: The aggregate market value thresholds remain a structural barrier to institutional participation and secondary market liquidity. A more adaptive threshold mechanism should be considered, as opposed to solely relying on future legislative adjustments through delegated acts, as proposed under the MIP. A staged and conditional increase mechanism, based on predefined criteria such as market uptake, liquidity conditions and supervisory assessments, could provide greater certainty and transparency for market participants while preserving regulatory oversight.
• Establishing a path to permanence: Market participants need a clear, time-bound transition from a "pilot" phase to permanent sectoral legislation to justify long-term infrastructure investments. While the current proposal requires ESMA to report on the pilot by 2030, the path forward following that report remains to be clearly defined. 
• Fast-tracking reforms: Advancing the DLT Pilot Regime updates on a standalone basis could prevent delays and maintain the EU’s competitive edge.

2. EMTs for Cash-Leg Settlement under the CSDR

We welcome the recognition of MiCA-compliant e-money tokens (EMTs) for cash-leg settlement in securities transactions. To ensure this framework is scalable, we propose:

• Permitting all MiCA-compliant EMTs: Restricting settlement via CSDs to "significant" EMTs risks excluding euro-denominated EMTs, and creating a chicken-and-egg scenario that stifles their growth. It is worth noting that currently, no euro-denominated EMTs are close to reaching the significance threshold in terms of market capitalisation.
• Aligning CSD Regulation (CSDR) with DLT Pilot Regime on EMT cash accounts: The current proposal restricts cash accounts to credit institutions and CSDs. We recommend allowing authorised Crypto-Asset Service Providers to provide EMT cash account services, consistent with the proposed amendments to the DLT Pilot Regime, and EBA guidance on the interplay between MiCA and the Second Payment Services Directive.
• International interoperability: Future reforms should consider, in due course, how non-EU issued stablecoins subject to comparable standards in their home jurisdiction can be used for settlement in the EU.

3. Calibrating Centralised Supervision

While we support the targeted approach to proposed reforms of MiCA within the context of the MIP, the transfer of the supervision of Crypto-Asset Service Providers to ESMA must be carefully calibrated. We recommend:

• Focusing on systemic actors: Centralised EU-level supervision should be reserved for large, cross-border Crypto-Asset Service Providers that present genuine systemic risk. National Competent Authorities are often better positioned to provide agile oversight for non-systemic firms. Moreover, reopening the fundamental authorisation and supervisory model risks prolonging regulatory uncertainty over MiCA implementation. 
• Reducing administrative friction: Currently, in the EU, a single firm faces oversight from multiple national and Union-level bodies under different regimes. This additional complexity risks hindering the EU’s growth and efficiency objectives.

4. Providing Legal Certainty for EMTs as Collateral

We believe that further progress should be made to incorporate EMTs into collateral frameworks, to facilitate the modernisation of EU capital markets. To provide this clarity, we recommend:

• Providing explicit confirmation of eligibility: Legislative updates—such as to the European Market Infrastructure Regulation—will significantly reduce barriers to adoption of EMTs for collateral use cases.
• Ensuring international competitiveness: International peers, including the U.S. CFTC and the UK’s Bank of England, are exploring the integration of tokenised instruments into their collateral and margin frameworks.

Looking Ahead

The Market Integration Package represents a pivotal moment for the EU’s vision of a deep and integrated capital markets union. By bridging the gap between traditional finance and on-chain infrastructure through clear and proportionate regulation, the Commission can unlock new levels of efficiency and liquidity. Circle remains a committed partner in this journey, providing the regulated, programmable infrastructure—including USDC and EURC—to enable the next generation of financial services in Europe.

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