Circle has urged the European Commission to revise parts of the European Union's MiCA stablecoin framework, arguing that targeted changes could enhance liquidity, market access, and reserve management across Europe's stablecoin ecosystem. The company made its recommendations in response to the Commission's consultation on its review of MiCA — the Markets in Crypto-Assets Regulation, the EU's comprehensive rulebook for crypto-assets, whose stablecoin provisions have applied since June 2024. How that review unfolds could shape the operating environment for every stablecoin issuer authorized in the bloc.

Under MiCA, stablecoins are regulated as e-money tokens, requiring authorized issuers to maintain permits and reserve backing. Circle received an electronic money institution license from French regulators in July 2024, making it one of the first global stablecoin issuers authorized under the regime and allowing it to offer MiCA-compliant versions of its stablecoins across the bloc.

Circle's Recommendations Draw on Two Years of MiCA Experience

Circle, which issues the USDC and EURC stablecoins — both regulated under MiCA — said its experience gives it hands-on knowledge of how the framework functions in practice. While the company considers the regulation a major step forward, it believes several targeted adjustments could strengthen Europe's position in the global stablecoin market.

Circle has submitted its response to the European Commission's MiCA Review Consultation. Our feedback draws on two years of experience operating USDC and EURC under MiCA, with a focus on strengthening Europe's role as a dynamic, liquid stablecoin market. In the response, we…

— Circle (@circle) October 1, 2026 (X post)

A Solid Foundation, but a Gap in Global Liquidity

Circle said MiCA has established a solid regulatory framework for digital currencies, with roughly 30 e-money tokens currently authorized under the regime — a milestone the company described as a step forward compared with other regulatory systems.

However, Circle identified a missing piece concerning large global stablecoins: only three of the top 25 stablecoins by market capitalization are regulated under MiCA — USDC, USDG, and EURC. The remainder of that top tier is dominated by dollar-denominated tokens issued and supervised outside the bloc. According to the company, the problem is not the absence of regulated European issuers, but limited access to global liquidity. Circle therefore wants MiCA to enable mechanisms that link European markets with stablecoin activity in the rest of the world.

Preserving Multi-Issuance

One proposed mechanism is multi-issuance, under which a single stablecoin can be issued by different regulated issuers in different jurisdictions — an arrangement Circle itself uses, issuing its MiCA-compliant tokens through its French-licensed entity. Circle said this model would allow global stablecoins to operate within Europe's regulatory environment.

The firm also warned that limiting multi-issuance could drive European customers toward offshore platforms, placing transactions outside the scope of MiCA's protections. Circle advised maintaining multi-issuance while enhancing safeguards, including provisions for moving between global reserves and reserves dedicated to European operations.

An Equivalence System for Non-EU Stablecoins

Circle further proposed a more comprehensive recognition system for non-EU stablecoins, modeled on the EU's existing equivalence regimes for financial markets — an approach Brussels has long applied in areas such as securities and clearing to grant third-country firms market access without full re-authorization. Under the proposal, foreign stablecoin issuers would remain under the primary jurisdiction of regulators in their home jurisdictions, while satisfying conditions deemed to meet European requirements.

The suggested system would operate in two stages. The European Commission would first determine whether a foreign regulatory regime offers the same level of protection; the European Banking Authority would then identify individual issuers within the approved framework. Distribution within Europe would take place through a locally licensed institution.

Circle said this structure could improve access for foreign-controlled stablecoins while preserving regulatory oversight, without forcing every issuer to build the same structure within Europe. The company also proposed reciprocal recognition of EU-issued stablecoins, which could allow European stablecoins to enter international markets under similar conditions.

Reserve Requirements and Banking-Sector Risk

Circle's response also addressed MiCA's reserve requirements. The company said mandatory bank deposits can expose stablecoin issuers to banking-sector risks — a design feature of MiCA, which requires issuers to hold a share of their reserves as deposits with credit institutions. Circle pointed to its experience in March 2023, when USDC temporarily lost its dollar peg after Circle disclosed that $3.3 billion of USDC reserves were held at Silicon Valley Bank. The episode, which played out over a weekend, became a widely cited example of counterparty concentration risk in stablecoin reserves. U.S. authorities subsequently safeguarded the bank's depositors and made the funds available, and USDC's dollar value recovered.

Next Steps

The European Commission will consider input from market participants as it conducts its MiCA review, assessing potential changes before making regulatory decisions. Any formal revision would still need to clear the EU's legislative process, with the European Parliament and the Council of the EU acting as co-legislators, so market participants will be watching whether the review produces concrete amendment proposals — and on what timeline. In the meantime, issuers continue to operate under the existing framework.