Circle urges EU to rethink stablecoin reserve rules in MiCA review

Circle has a proposal for Brussels: stop telling stablecoin issuers exactly how much cash to park in banks.

The issuer of USDC and EURC filed a response to the European Commission’s review of the Markets in Crypto-Assets regulation, known as MiCA, on or around October 1, 2026. Its central request is that the EU replace mandatory bank-deposit minimums with more flexible, liquidity-based reserve rules. It also wants the bloc to keep cross-border stablecoin issuance on the table.

What Circle wants changed

Under the current framework, issuers of electronic money tokens (EMTs) must hold at least 30% of their reserves as commercial bank deposits. For tokens classified as significant, that floor jumps to 60%.

EMTs are MiCA’s label for stablecoins pegged to a single official currency. USDC tracks the dollar, and EURC tracks the euro.

Circle’s argument is that the rule is restrictive and could actually raise risks for the banking sector rather than shrink them. If a large slice of a stablecoin’s backing must sit in commercial banks, then a wave of redemptions turns into a wave of bank withdrawals. A rule meant to protect token holders could end up stressing the institutions holding their money.

Circle would rather see dynamic liquidity requirements. The idea is to judge reserves by how quickly they can meet redemptions, not by a fixed percentage stamped onto one asset type.

Here Circle has notable company. The European Central Bank and the European System of Central Banks suggested on September 22, 2026 that fixed deposit floors be swapped for liquidity-based metrics.

Cross-border issuance and equivalence

Circle is pushing for the adoption of multi-issuance models, which let the same token be issued by entities in different jurisdictions, including inside the EU, while remaining a single interchangeable asset. Circle says its position draws on two years of experience operating under MiCA.

The company also backs creating an equivalence regime for foreign issuers. Circle frames this as a way to reduce the risk of activity moving outside the EU framework. If compliance inside Europe becomes too awkward, issuers and the business built on them may simply operate elsewhere.

A crowded licence list, a thin compliant market

Around 30 EMTs have received authorization since the regime came into force. Of the top 25 to 30 stablecoins, only three meet MiCA compliance: USDC, EURC and USDG.

EURC’s circulation has reportedly grown to approximately €400 million, reflecting more than 100% growth year over year. Research on the filing attributes much of that growth to Circle’s adherence to MiCA’s requirements.

Disclosure: This article was edited by John Chen. For more information on how we create and review content, see our Editorial Policy.