Stablecoin issuer Circle has urged the European Commission to scrap mandatory bank-deposit minimums for e-money token issuers, arguing the requirements concentrate rather than reduce risk. The company laid out its position in a response to the Commission's consultation on reviewing the Markets in Crypto-Assets Regulation, which closed Wednesday, and published a summary on Thursday.

Circle, the issuer of USDC and EURC, said MiCA's requirement to hold a fixed share of reserves in commercial bank deposits exposes stablecoin issuers to banking-sector credit and counterparty risk. The company speaks from experience. In March 2023, USDC temporarily lost its dollar peg after Circle disclosed that $3.3 billion of its reserves sat at Silicon Valley Bank. US authorities subsequently protected the failed bank's depositors, and the funds became available to Circle.

Where Circle and the ECB agree

MiCA currently requires e-money token issuers to hold at least 30% of reserves in commercial bank deposits, with a higher minimum of 60% for issuers designated as significant, according to Circle. The company backed replacing those mandatory deposit minimums with a more flexible minimum asset liquidity requirement — a position that aligns it with the European Central Bank.

Circle also called for removing two reserve concentration limits: a 35% cap on exposure to a single sovereign and a ceiling on deposits with each counterparty equivalent to 1.5% of that bank's total assets.

On market structure, the issuer urged the Commission to preserve "multi-issuance," the arrangement under which a European Union-authorized entity and a foreign-regulated counterpart co-issue a stablecoin. Restricting that structure, Circle argued, would push users toward offshore providers operating outside MiCA's investor protections.

Industry groups weigh in on derivatives and classification

Circle was not the only respondent pressing for changes. The Hyperliquid Policy Center urged the Commission to treat crypto perpetual futures under the EU's existing securities and derivatives framework — the second Markets in Financial Instruments Directive, or MiFID II. The group asked for requirements tailored to perpetual futures' market structure and for recognition of public blockchain records as a means of meeting transparency and recordkeeping obligations.

The Global Blockchain Business Council took a broader tack, recommending clearer token classification, proportionate stablecoin safeguards and less duplication between MiCA and the EU's payment-services rules. On cross-border issuance specifically, GBBC called for clearly assigned redemption responsibilities, enforceable reserve rebalancing mechanisms and an accountable EU supervisory framework.

Operational stakes

The consultation, which sought feedback on whether MiCA remains fit for purpose as crypto markets develop, will inform the Commission's assessment of the regulation and of activities beyond its current scope. For issuers, the reserve rules carry direct operational consequences: deposit minimums determine where billions in reserves must sit, which banks they depend on, and how quickly they can rebalance holdings during stress. The 2023 SVB episode demonstrated how a single banking counterparty can translate into an instant depeg for a major stablecoin.

The Commission has not set a timeline for concluding the MiCA review, but the consultation responses now feed into its formal assessment — the window in which the EU's stablecoin reserve framework could be redrawn.