Circle has submitted its response to the European Commission's targeted consultation on the review of the Markets in Crypto-Assets Regulation (MiCA)
Circle has submitted its response to the European Commission's targeted consultation on the review of the Markets in Crypto-Assets Regulation (MiCA). Our submission reflects two years of operating experience as the largest MiCA-authorised e-money token (EMT) issuer, and is intended to help build on the regulatory and market leadership MiCA has already established, with the goal of positioning Europe as one of the most dynamic and liquid stablecoin markets in the world.
Circle issues both the largest dollar-denominated (USDC) and the largest euro-denominated (EURC) e-money tokens authorised under MiCA. That vantage point gives us a detailed, practical perspective on where the framework is working well and where targeted refinements could help it deliver more fully on its original goals.
Where MiCA Has Delivered
MiCA has given Europe a genuine head start: roughly 30 e-money tokens are now authorised under the regulation, more than any comparable framework has produced elsewhere in the world in a similar timeframe. That is a meaningful foundation to build on.
At the same time, the data points to an opportunity. Of the top 25 stablecoins globally by market capitalisation, only three are currently MiCA-regulated (USDC, USDG, EURC). This suggests the current gap is not in the supply of new regulated issuers, but in MiCA's perimeter capturing the largest global tokens, and in EU-issued EMTs growing at global scale. Our submission focuses on the areas of the framework we believe are most relevant to closing that gap.
Multi-Issuance: A Pathway That Reflects Today's Global Market
Most stablecoins in circulation globally today are issued by entities regulated outside the EU. Multi-issuance, under which a globally circulating stablecoin is co-issued by a MiCA-authorised EU entity alongside its foreign-regulated counterpart, is currently the only structure through which that global liquidity can operate within MiCA's regulatory perimeter.
The Commission's own 2020 impact assessment for MiCA noted the risk that prohibiting foreign stablecoins from EU markets would incentivise users to buy stablecoins from offshore parties outside the EU, leaving them without the rights and protections MiCA was designed to deliver. Restricting multi-issuance would simply relocate that usage outside the EU's regulatory perimeter. Our submission recommends preserving multi-issuance as an available structure and formalising the safeguards already available to manage its risks, including dynamic rebalancing between global and EU-specific reserves.
A Longer-Term Complement: Equivalence and Recognition
Our response sets out a longer-term architecture we believe would serve the market well as it matures: a dedicated equivalence and recognition regime for foreign-regulated stablecoins, modelled on the EU's existing equivalence frameworks under EMIR, CSDR, and MiFIR and the U.S.'s equivalence regime for foreign payment stablecoins under the GENIUS Act.
Under this model, a foreign-regulated issuer would remain primarily supervised in its home jurisdiction, following a two-tier process combining a Commission-level regime equivalence determination with EBA-level entity recognition. Distribution in the EU would take place through a locally licensed institution. This structure would also work in reverse — supporting the international circulation of EU-issued stablecoins under reciprocal recognition arrangements.
Reserve Requirements: Prioritising Safety and Liquidity
MiCA currently requires e-money token issuers to hold a minimum of 30% of reserve assets in commercial bank deposits, rising to 60% for issuers of EMTs classified as "significant." In our response, we note that this requirement increases exposure to the credit and counterparty risk of the banking sector. We therefore concur with the ECB that this mandatory minimum deposit requirement should be reconsidered and replaced with a less rigid minimum asset liquidity requirement under MiCA.
We also recommend removing two concentration rules introduced through the EBA's Level 2 technical standards: the 35% cap on single-sovereign exposure, which makes it impossible for non-EU currency issuers (e.g. USD-denominated tokens) to hold primarily sovereign HQLAs in their reserve, and the 1.5%-of-total-bank-assets cap per banking counterparty, which will require larger issuers to maintain reserve relationships with dozens of separate banks to stay within the limit, thereby increasing operational complexity and risk.
Looking Ahead
MiCA has positioned the EU as a genuine first mover in comprehensive stablecoin regulation. Our response is intended as a constructive contribution to the next phase of that framework: one focused on translating regulatory leadership into deeper liquidity, broader adoption, and a more dynamic role for Europe and euro stablecoins in the global market. We look forward to continuing to work with the European Commission, European policymakers, and regulators as this review progresses.
