Circle has asked the European Commission to scrap the MiCA rule that forces stablecoin issuers to keep a fixed share of their reserves in bank deposits.
The USDC issuer filed its response to the Commission’s MiCA review consultation, which closed on 30 September, and published it on Thursday. It is not alone. On 22 September the European System of Central Banks, the ECB plus all 27 national central banks, asked for the same rule to go.
What the rule requires
Under MiCA, an e-money token issuer must hold at least 30% of its reserves as commercial bank deposits. For tokens designated significant, the floor rises to 60%.
Two further limits sit on top. Exposure to any single sovereign is capped at 35%, and the amount held at any one bank is capped, which Circle says forces a large issuer to spread reserves across dozens of banks. Circle wants both caps removed and the deposit floor replaced with a flexible liquidity requirement.
Same fix, opposite fears
The two filings reach the same answer from opposite ends of the same wire.
Circle argues the mandate increases its exposure to bank credit risk. It has a precedent. In March 2023, $3.3bn of USDC reserves sat at Silicon Valley Bank when it failed, and USDC briefly lost its dollar peg.
The central banks’ worry runs the other way. A deposit that is a safe reserve for an issuer is a liability for the bank holding it, and stablecoin money can leave fast in a redemption wave. Their proposal replaces the deposit floor with a requirement that a share of reserves mature within one to five working days, so a stablecoin run does not travel straight into the banking system.
Why Circle wants more than reserves changed
Circle’s wider argument is that MiCA has licensed plenty of issuers without capturing the tokens people actually use. Of the 25 largest stablecoins by market value, it says, only three are MiCA-regulated.
It also asked the Commission to preserve multi-issuance, where an EU-authorised entity and a foreign-regulated counterpart issue the same token, warning that restricting it would push activity offshore.
What happens next
Nothing changes yet. The 30% and 60% floors remain in force, and the Commission is expected to fold the consultation into a broader MiCA rewrite in 2027.
The coincidence of views matters for that rewrite. A rule opposed by a major stablecoin issuer and by every central bank in the EU is under real pressure, but the two sides want it gone for different reasons, and they will not necessarily agree on what replaces it.
