Circle, the issuer of USDC and EURC, has filed a response to the European Commission's review of the Markets in Crypto-Assets regulation, asking Brussels to scrap mandatory bank-deposit minimums for stablecoin reserves and replace them with flexible, liquidity-based requirements. The filing, submitted on or around October 1, 2026, also presses the bloc to preserve cross-border stablecoin issuance.

The current MiCA framework requires issuers of electronic money tokens (EMTs) — the regulation's category for stablecoins pegged to a single official currency — to hold at least 30% of their reserves as commercial bank deposits. For tokens classified as significant, that floor rises to 60%. USDC tracks the dollar; EURC tracks the euro.

Why Circle wants the deposit floors gone

Circle argues the rule is restrictive and could raise risks for the banking sector rather than reduce them. If a large slice of a stablecoin's backing must sit in commercial banks, a wave of redemptions becomes a wave of bank withdrawals. A rule designed to protect token holders could end up stressing the very institutions holding their money.

The company proposes dynamic liquidity requirements instead. Under that approach, regulators would judge reserves by how quickly they can meet redemptions, not by a fixed percentage stamped onto one asset class.

Circle is not alone in this position. 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 — a notable alignment between the industry's largest compliant issuer and the bloc's monetary authorities.

What does Circle want on cross-border issuance?

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

The filing also backs an equivalence regime for foreign issuers. Circle frames this as a way to reduce the risk of activity migrating outside the EU framework: if compliance inside Europe becomes too cumbersome, issuers and the businesses built on top of them may simply operate elsewhere.

A crowded licence list, a thin compliant market

The stakes are visible in the market structure. Around 30 EMTs have received authorization since the regime came into force. Yet of the top 25 to 30 stablecoins globally, only three meet MiCA compliance: USDC, EURC and USDG.

Circle's own euro stablecoin shows what compliance can deliver. 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.

The operational consequences of the current reserve rules cut both ways. Issuers must park significant balances with commercial banks, concentrating exposure to those institutions and tying reserve management to the banking sector's health. A shift to liquidity-based metrics would let issuers hold a broader mix of assets, provided they can demonstrate redemption capacity under stress.

For the European Commission, the MiCA review now has to balance two competing pressures: keeping stablecoin activity — and the associated reserve balances — inside the EU's regulatory perimeter, and avoiding rules that channel systemic redemption risk directly into commercial banks. With the ECB itself questioning the deposit floors, the argument over how stablecoin reserves should be measured has moved from industry lobbying into mainstream policy.

The Commission's review of MiCA remains the decision point: any proposal to amend the reserve requirements or introduce an equivalence regime for foreign issuers would need to clear the EU legislative process before taking effect.