Key Highlights
- Circle submitted its response to the European Commission’s targeted consultation on the review of the Markets in Crypto-Assets Regulation (MiCA) on October 1.
- Circle operates as a MiCA-authorized e-money token issuer and issues USDC and EURC under the European regulatory framework.
- The company recommended preserving multi-issuance, which allows globally circulating stablecoins to be issued through both EU-authorized and foreign-regulated entities.
Circle, the issuer of the USDC stablecoin, has submitted its response to the European Commission’s targeted consultation on the review of the Markets in Crypto-Assets Regulation (MiCA).
According to the official blog post on October 1, the submission draws on the company’s experience operating as a MiCA-authorized e-money token issuer. Circle issues the dollar-denominated USDC and the euro-denominated EURC, both authorized as e-money tokens under MiCA. The company said it has operated under the framework for two years.
Authorized tokens and market coverage
According to Circle’s submission, roughly 30 e-money tokens are now authorized under MiCA. Of the top 25 stablecoins globally by market capitalization, only three are currently MiCA-regulated: USDC, USDG, and EURC.
The response identifies areas of the framework related to the inclusion of larger global tokens and the ability of EU-issued e-money tokens to operate at a global scale.
Most stablecoins in global circulation are issued by entities regulated outside the European Union. Multi-issuance allows a globally circulating stablecoin to be co-issued by a MiCA-authorized EU entity alongside its foreign-regulated counterpart. Circle’s submission states that this is currently the only structure enabling that global liquidity to operate within MiCA’s regulatory perimeter.
The submission references the European Commission’s 2020 impact assessment for MiCA, which noted the risk that prohibiting foreign stablecoins from EU markets could incentivize users to obtain them from offshore parties outside the EU.
Circle recommends preserving multi-issuance as an available structure and formalizing existing safeguards, including dynamic rebalancing between global and EU-specific reserves.
Equivalence and recognition regime
The response outlines a longer-term proposal for a dedicated equivalence and recognition regime for foreign-regulated stablecoins. The model is based on existing EU equivalence frameworks under EMIR, CSDR, and MiFIR, as well as the U.S. equivalence regime for foreign payment stablecoins under the GENIUS Act.
Under the proposed approach, a foreign-regulated issuer would remain primarily supervised in its home jurisdiction. The process would combine a Commission-level regime equivalence determination with European Banking Authority-level entity recognition.
Distribution in the EU would occur through a locally licensed institution. Circle describes the structure as reciprocal, supporting international circulation of EU-issued stablecoins under corresponding recognition arrangements.
Circle calls for changes to reserve requirements
MiCA requires e-money token issuers to hold a minimum of 30% of reserve assets in commercial bank deposits, rising to 60% for issuers of e-money tokens classified as significant. Circle’s submission states that the requirement increases exposure to banking-sector credit and counterparty risk.
The company concurs with the European Central Bank that the mandatory minimum deposit requirement should be reconsidered and replaced with a less rigid minimum asset liquidity requirement.
The response also recommends removal of two concentration rules introduced through the European Banking Authority’s Level 2 technical standards.
One is the 35% cap on single-sovereign exposure, which Circle says makes it impossible for non-EU currency issuers to hold primarily sovereign high-quality liquid assets in their reserves.
The other is the 1.5% of total bank assets cap per banking counterparty. Circle says the rule would require larger issuers to maintain relationships with numerous separate banks, increasing operational complexity and risk.
Related MiCA developments
Separately, European regulators have been examining Binance’s continued service to customers in the European Union after the exchange did not obtain a MiCA license and was expected to wind down its EU business from July 1.
The European Securities and Markets Authority, along with regulators in France, Germany, and Greece, has requested information regarding Binance’s reliance on the reverse-solicitation exemption. Tests conducted by the Geneva-based publication Sandmark on August 19, 2026, found that new accounts could be opened, verified, and funded from several EU countries after the deadline.
The European Securities and Markets Authority has also proposed changes to MiCA as part of the broader review. The proposals address stronger investor protection, tighter supervision, stricter rules on crypto marketing, including the role of influencers, clearer pre-contractual information on fees, risks, and related matters, and clearer requirements for staking, lending, and borrowing activities.
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