What happened
Circle submitted a formal response to the European Commission's MiCA consultation on Thursday, pressing Brussels to drop the fixed bank deposit requirement that applies to stablecoin reserves held by e-money token issuers, per Crypto.News. The current rule obliges issuers of significant e-money tokens to park a defined portion of reserve assets as deposits with EU-authorized credit institutions. Circle, which issues USDC and the euro-denominated EURC, argues the obligation should be replaced by a more flexible framework that lets issuers hold reserves across a broader set of high-quality liquid instruments.
The filing targets Article 36 of the regulation, the provision that governs the composition of reserve assets backing asset-referenced and e-money tokens. Circle's position, as reported by Crypto.News, is that forcing issuers to concentrate client funds inside a small set of eurozone banks creates a single point of failure. The firm has not published the full submission publicly, but the consultation window gives regulators a documented view of industry pushback before any technical standards get redrafted.
Why it matters
MiCA is the only comprehensive stablecoin rulebook live in a major jurisdiction right now, and the deposit floor is the piece most issuers have flagged as commercially painful. Circle secured its French electronic money institution license in July 2024, making it the first global stablecoin issuer to go fully MiCA-compliant. Every basis point of yield lost to a sub-optimal reserve mix shows up in the firm's net interest margin, and USDC's European float has grown materially since the license landed.