Circle, the issuer of USDC and euro-backed EURC, is pushing European policymakers to reform regulations that currently block stablecoins from powering trade settlements across the continent's €126 trillion capital markets. In feedback submitted on 20 March 2026, to the European Commission's Market Integration Package (MIP), Circle praised the proposal as a meaningful step forward but identified critical gaps that could stifle institutional adoption of tokenized assets.
The crux of Circle's argument centers on the Distributed Ledger Technology (DLT) Pilot Regime, launched in March 2023 to test blockchain-based market infrastructures. Despite its promise, the regime has authorized only three platforms with minimal live transactions, largely because current rules restrict cash settlements to e-money tokens issued by credit institutions—excluding e-money institutions like Circle.
"Aggregate market value thresholds remain a structural barrier to institutional participation and secondary market liquidity"
Circle's EURC, fully compliant with the EU's Markets in Crypto-Assets (MiCA) regulation, maintains a 1:1 peg to the euro and is backed by 100% reserves in segregated European accounts. Regulated by France's ACPR – Banque de France, EURC saw its market capitalization surge from €70 million to over €300 million during 2025. Yet regulatory barriers prevent it from serving as a settlement asset in the pilot program.
"This creates a structural bottleneck," Circle stated in its submission, urging the Commission to allow all MiCA-compliant e-money tokens in settlements without imposing size thresholds that would exclude euro-denominated stablecoins. The company also called for crypto-asset service providers—not just traditional banks and central securities depositories—to offer settlement accounts, aligning with frameworks emerging in the US and UK.
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Deutsche Börse Partnership Signals Commercial Stakes
Circle's advocacy carries significant commercial weight. In September 2025, the company signed an agreement with Deutsche Börse Group to integrate USDC and EURC into European trading, settlement, and custody infrastructure. This partnership underscores the practical applications Circle envisions if regulatory reforms succeed.
The company also supports other MIP proposals, including expanding eligible assets under the DLT pilot, raising trading volume thresholds, and implementing "adaptive" caps tied to market conditions to enhance liquidity. Circle backs tiered supervision by the European Securities and Markets Authority (ESMA), reserving direct oversight for large cross-border firms while allowing national regulators to supervise smaller operators.
Global Momentum Behind Stablecoin Integration
Circle's push reflects broader international trends. The US GENIUS Act, signed in July 2025, established the first federal stablecoin framework, while the UK is advancing similar collateral rules. Circle executive Kash Razzaghi highlighted stablecoins' payment potential in a Mastercard partnership announcement: "If you're moving money from Singapore to New York, you can do it with stablecoins now... not beholden to banking hours."
The Market Integration Package now enters trilogue negotiations with the European Parliament and Council, a process expected to extend through the end of 2026. Success could enable atomic, on-chain settlements that slash intermediaries and processing times from days to seconds, transforming how institutions interact with digital assets.
What's at Stake for European Markets
Industry observers note that reforms could determine whether Europe maintains its regulatory leadership in crypto or cedes ground to competitors. Allowing stablecoins in settlements would provide the infrastructure needed for tokenized securities, bonds, and other assets to scale across European markets.
Circle warned that delays or overly restrictive thresholds could limit secondary market development and reduce institutional engagement with blockchain technology. With EURC's demonstrated growth and established compliance credentials, the company argues that MiCA-compliant stablecoins are ready to support Europe's digital capital markets—if regulators remove existing barriers.