Circle urges the EU to replace MiCA's bank-deposit minimum for stablecoin reserves
Circle told the European Commission that only 3 of the world's top 25 stablecoins are authorized under MiCA, in its response to the law's review. Circle issues two of the three, and it ties the gap to bank-deposit and concentration rules it wants loosened.
The Scientist · Science desk
What happened
- MiCA requires e-money token issuers to keep at least 30% of reserve assets in commercial bank deposits, rising to 60% for tokens classed as significant.
- Circle asks for removal of two EBA Level 2 concentration rules: a 35% cap on single-sovereign exposure and a cap of 1.5% of total bank assets per bank.
- Circle wants multi-issuance kept and its existing safeguards formalized, including dynamic rebalancing between global and EU-specific reserves.
- Longer term, Circle proposes an equivalence and recognition regime for foreign stablecoins modeled on EMIR, CSDR, MiFIR and the US GENIUS Act.
Why it matters
- Who's exposed exposure Because of the deposit floor, holders of every MiCA token carry some commercial-bank credit and counterparty risk. Circle wants the Commission to stop requiring that exposure.
- What it limits constraint If Circle's reading of the 35% sovereign cap is right, an issuer of a non-EU currency token cannot build its reserve mainly from government liquid assets and stay MiCA-compliant.
- What's now possible capability An equivalence regime would let a foreign issuer stay supervised at home and sell into the EU through a locally licensed firm. Circle wants EU tokens to get matching recognition abroad.
Three of 25 is 12 percent [23]. According to Circle's submission, the three are USDC, USDG and EURC [12]. Roughly 30 e-money tokens are authorized in total [15], so about 27 licensed tokens sit outside the global top 25 [26]. The count comes from Circle's October 1 response to the Commission's consultation [1]. Circle issues two of the three [27] and says it has operated under MiCA for two years [14]. I'd treat the count as a description of where licensed supply sits today. The submission, as cryptotimes.io reports it, organizes its requests around bringing larger global tokens inside the framework [13]. It does not connect the absence of any of the other 22 [24] to a specific rule.
On the deposit floor, Circle says it agrees with the European Central Bank that the minimum should be reconsidered and replaced with a less rigid minimum asset liquidity requirement [5]. That ECB position is known here only secondhand, through Circle's filing. Circle's objection to the per-bank cap is a different one. It says the cap would force larger issuers to keep relationships with numerous separate banks, adding operational complexity and risk [11]. The two rules add up. The floor sets how much of a reserve must sit in banks [4], and the cap limits how much any one bank can take, so the number of banks rises with the size of the issuer [11].
Circle is defending multi-issuance. Most stablecoins in global circulation are issued by entities regulated outside the EU [2]. Under multi-issuance, a MiCA-authorized EU entity co-issues a global token alongside its foreign-regulated counterpart [3]. Circle says this is currently the only structure that lets that global liquidity operate inside MiCA's regulatory perimeter [3]. The filing cites the Commission's own 2020 impact assessment for MiCA, which noted the risk that prohibiting foreign stablecoins could push users to obtain them from offshore parties outside the EU [7]. For the longer term, Circle's equivalence route would have two levels: a Commission-level determination that a foreign regime is equivalent, then entity recognition at the European Banking Authority [18].
A separate case concerns the same perimeter. Binance did not obtain a MiCA license and was expected to wind down its EU business from July 1 [20]. The European Securities and Markets Authority and regulators in France, Germany and Greece have requested information on its reliance on the reverse-solicitation exemption [21]. Tests by the Geneva-based publication Sandmark on August 19, 2026, found that new accounts could still be opened, verified and funded from several EU countries after the deadline [22].
What to watch
- Whether the Commission's review proposal replaces the bank-deposit minimum with the liquidity requirement that Circle says the ECB also favors.
- Whether the EBA reopens its Level 2 standards on the 35% single-sovereign cap and the 1.5% per-bank cap.
- How ESMA's own review proposals for stronger investor protection and tighter supervision sit against calls to loosen reserve rules.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence60
- Adoption30
- Hype gap+20
- Incentives80
- Confidence65
Perspective Coverage
5 publishers- Builder
- Builder 18%
- Operator
- Operator 42%
- Investor
- Investor 40%
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
Circle, issuer of USDC, submitted its response to the European Commission's targeted consultation on the review of MiCA, according to an official blog post on October 1.
- [2]
Most stablecoins in global circulation are issued by entities regulated outside the European Union.
- [3]
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 this is currently the only structure enabling that global liquidity to operate within MiCA's regulatory perimeter.
- [4]
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.
- [5]
Circle 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.
- [6]
Circle recommends preserving multi-issuance as an available structure and formalizing existing safeguards, including dynamic rebalancing between global and EU-specific reserves.
- [7]
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.
- [8]
Circle's submission states that the deposit requirement increases exposure to banking-sector credit and counterparty risk.
- [9]
Circle recommends removal of two concentration rules introduced through the European Banking Authority's Level 2 technical standards: a 35% cap on single-sovereign exposure and a 1.5% of total bank assets cap per banking counterparty.
- [10]
Circle says the 35% single-sovereign cap makes it impossible for non-EU currency issuers to hold primarily sovereign high-quality liquid assets in their reserves.
- [11]
Circle says the 1.5% per-banking-counterparty cap would require larger issuers to maintain relationships with numerous separate banks, increasing operational complexity and risk.
- [12]
According to Circle's submission, of the top 25 stablecoins globally by market capitalization, only three are currently MiCA-regulated: USDC, USDG and EURC.
- [13]
Circle's 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.
- [14]
Circle issues the dollar-denominated USDC and the euro-denominated EURC, both authorized as e-money tokens under MiCA, and said it has operated under the framework for two years.
- [15]
According to Circle's submission, roughly 30 e-money tokens are now authorized under MiCA.
- [16]
Circle outlines a longer-term proposal for a dedicated equivalence and recognition regime for foreign-regulated stablecoins, modeled on EU equivalence frameworks under EMIR, CSDR and MiFIR and the U.S. equivalence regime for foreign payment stablecoins under the GENIUS Act.
- [17]
Under Circle's proposed approach, a foreign-regulated issuer would remain primarily supervised in its home jurisdiction, and distribution in the EU would occur through a locally licensed institution.
- [18]
The proposed process would combine a Commission-level regime equivalence determination with European Banking Authority-level entity recognition.
- [19]
Circle describes the proposed structure as reciprocal, supporting international circulation of EU-issued stablecoins under corresponding recognition arrangements.
- [20]
Binance did not obtain a MiCA license and was expected to wind down its EU business from July 1; European regulators have been examining its continued service to EU customers.
- [21]
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.
- [22]
Tests conducted by the Geneva-based publication Sandmark on August 19, 2026, found that new Binance accounts could be opened, verified and funded from several EU countries after the deadline.
- [23]
Three of the top 25 stablecoins is 12 percent.
- [24]
22 of the top 25 stablecoins are not MiCA-regulated.
- [25]
ESMA has also proposed changes to MiCA as part of the broader review, addressing stronger investor protection and tighter supervision.
- [26]
About 27 MiCA-authorized e-money tokens sit outside the global top 25 stablecoins.
- [27]
Circle issues two of the three top-25 stablecoins that are MiCA-regulated (USDC and EURC).
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Sources
5 independent publishers whose own reporting we read for this story.
- cointelegraph.comCircle urges EU to revise stablecoin reserve rules in MiCA review
1 article · October 2, 2026
- crypto.newsCircle wants EU to ease MiCA bank deposit rules for stablecoins
1 article · October 2, 2026
- cryptobriefing.comCircle urges EU to rethink stablecoin reserve rules in MiCA review
1 article · October 2, 2026
- cryptotimes.ioCircle Urges EU to Rework MiCA Stablecoin Reserve Requirements
1 article · October 1, 2026
- decrypt.coCircle Pushes Back on MiCA's Bank-Deposit Mandate for Stablecoins
1 article · October 2, 2026
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