Circle’s MiCA review response asks for a liquidity test instead of a bank-deposit quota, and a formal route for foreign stablecoins to circulate in the EU.
At a glance
- Circle has asked the European Commission to replace MiCA’s rule that e-money token issuers keep at least 30% of reserves in bank deposits, or 60% if the token is “significant”, with a minimum liquidity requirement.
- The USDC issuer also wants two EBA concentration caps removed and multi-issuance kept as a legal structure, with an equivalence regime for foreign-regulated stablecoins later.
Circle has asked the European Commission to scrap the minimum bank-deposit share that MiCA sets for stablecoin reserves, according to its response to the Commission’s MiCA review, published on its blog on 1 Oct 2026.
The Commission’s targeted consultation on reviewing MiCA, the EU’s Markets in Crypto-Assets Regulation, closed on Wednesday 30 Sep.
The MiCA review asks
Under Article 54 of MiCA, at least 30% of the funds an issuer receives for e-money tokens must sit in separate accounts at credit institutions. EBA technical standards raise that to 60% for significant tokens.
Circle said the requirement “increases exposure to the credit and counterparty risk of the banking sector”. It said it agrees with the European Central Bank (ECB) that the deposit floor should be replaced with “a less rigid minimum asset liquidity requirement”.
The ECB-led European System of Central Banks made that proposal in its own consultation response in September, suggesting minimum shares of reserve assets that mature within one and five working days.
Circle also asked the Commission to remove two caps set in the EBA’s Level 2 standards: a 35% limit on exposure to a single sovereign, and a cap of 1.5% of a bank’s total assets per banking counterparty. Circle said the second cap would force larger issuers to spread reserves across dozens of banks.
Multi-issuance
Circle asked the Commission to keep multi-issuance, in which a MiCA-authorised EU entity co-issues a token alongside a foreign-regulated affiliate. Over the longer term, it proposed an equivalence and recognition regime for foreign-regulated stablecoins, modelled on existing EU frameworks such as EMIR and MiFIR and on the US GENIUS Act.
The ECB’s response took a different line on this point. It backed the European Systemic Risk Board’s 2025 recommendation on third-country multi-issuer schemes and called for legal clarity on whether they are allowed under MiCA at all.
Context
Circle said about 30 e-money tokens are now authorised under MiCA, but only three of the 25 largest stablecoins by market value are MiCA-regulated: USDC, USDG and EURC. Circle’s USDC and EURC are the largest dollar and euro tokens authorised in the EU, the company said. CryptoWatchDesk explains the current framework in MiCA’s stablecoin rules, and the basics in what a dollar stablecoin is.
What it changes
For users and merchants, nothing changes yet: MiCA’s reserve rules stay in force until the EU legislators amend them. If the deposit floor were replaced, issuers could hold more of their reserves in short-dated government debt and less in bank accounts.
The Commission has not said when it will publish proposals following the consultation. More on stablecoin regulation in the EU.
Produced by the Crypto Watch Desk newsroom using AI tools. This article is for information only and is not investment advice.