What happened
Circle and Tether, the two largest stablecoin issuers by circulating supply, publicly converged on a shared position against MiCA's bank reserve architecture, according to CryptoSlate's Monday reporting. The specific rule under attack is the mandate that euro-referenced electronic money tokens hold between 30 and 60 percent of their reserves as deposits with EU-authorized credit institutions, depending on issuer size and systemic designation.
The joint longer-term proposal, as described in the source report, would replace that bank-centric structure with a two-step gatekeeping process: a European Commission equivalence determination for the issuer's home jurisdiction, followed by issuer-level recognition from the European Banking Authority, before the token could be distributed inside the bloc through a locally licensed institution.
The alignment is unusual. Circle has spent the last two years marketing itself as the compliant counter to Tether, securing an Electronic Money Institution license in France in July 2024 to issue USDC and EURC under MiCA. Tether has publicly declined to pursue MiCA authorization for USDT and watched several EU exchanges delist the token through 2024 and 2025 as a result.
For both to land on the same technical fix suggests the bank reserve rule hits them for different reasons but with equal force.
Why it matters
The bank reserve requirement was the single most contested provision during MiCA's trilogue negotiations in 2022 and 2023. European lawmakers wrote it in to insulate the bloc's payment system from a Terra-style collapse and to funnel stablecoin backing assets into the regulated banking sector. Issuers argued then, and are arguing now, that forcing 30 to 60 percent of reserves into bank deposits introduces exactly the counterparty risk the rule claims to mitigate.