Circle Asks EU to Drop MiCA's 60% Bank-Deposit Rule

Circle wants Brussels to stop forcing it to hold 30% to 60% of USDC and EURC reserves in commercial bank deposits. The European Central Bank and every national central bank in the EU asked for the same change a week earlier, but for a different reason: protecting the banking system, not easing rules for stablecoin issuers.

What Circle told the European Commission

Circle filed its response to the European Commission's targeted consultation on reviewing the Markets in Crypto-Assets Regulation, or MiCA, on Thursday, October 1, 2026, according to the company's own blog post and Cointelegraph's review of the filing. Circle, which issues the dollar-pegged USDC and the euro-pegged EURC, framed its recommendations as refinements to a framework it credits with giving Europe an early lead. The company has operated under MiCA since obtaining a French electronic-money-institution license in July 2024.

MiCA currently requires e-money token issuers to hold at least 30% of reserves in commercial bank deposits, with a higher minimum of 60% for significant issuers, according to Circle. Circle backed reconsidering the mandatory deposit minimums and replacing them with a more flexible minimum asset liquidity requirement, agreeing with the European Central Bank. The company also called for removing two reserve concentration limits that impose a 35% cap on exposure to a single sovereign and a ceiling on deposits with each counterparty equivalent to 1.5% of that bank's total assets.

Circle separately pressed the Commission to preserve what it calls "multi-issuance" — an arrangement letting a MiCA-authorized entity and a non-EU regulated affiliate co-issue the same token under one global brand. It urged the EU to preserve "multi-issuance" (warning restrictions would push activity offshore) and to loosen reserve rules, siding with the ECB against the 30%-to-60% bank-deposit mandate.

Why Circle points to a 2023 bank failure

Circle's argument draws on its own experience with the rule it is now challenging. Circle faced those risks firsthand in March 2023, when USDC temporarily lost its dollar peg after the company disclosed that $3.3 billion of its reserves were held at Silicon Valley Bank. The funds were subsequently made available after US authorities protected the bank's depositors. In its own submission, Circle also made a coverage argument: of the top 25 stablecoins globally by market capitalisation, only three are currently MiCA-regulated (USDC, USDG, EURC).

The ECB wants the same change, for a different reason

Circle's position lines up with one the European Central Bank had already staked out days before. The European System of Central Banks, which includes the European Central Bank and the national central banks of all 27 EU countries, recommended removing MiCA's minimum bank-deposit requirement in its response to a review of the bloc's crypto rules. That submission was dated September 22, 2026, roughly a week before Circle's.

Overlapping requests do not mean overlapping motives. As FinTech Weekly summarized the central banks' filing, the reason is financial stability, not crypto friendliness. The ECB's concern is that tying a large, fixed share of stablecoin reserves to specific banks links the stablecoin system's fate to the banking system's, so a bank-level problem could spread into stablecoin redemptions or vice versa. Circle's complaint is narrower: the current rule put $3.3 billion of its own reserves at one failed bank in 2023, and it wants a liquidity-based test instead of a fixed percentage.

The same review also surfaced a reason some large stablecoins have stayed out of the EU altogether. Tether CEO Paolo Ardoino said the USDT issuer did not pursue an EU license because of MiCA requirements that significant issuers keep 60% of reserves in bank deposits — the same threshold Circle is now asking Brussels to remove.

What the consultation does and does not decide

Nothing about MiCA changes today. The Commission's review opened on May 20, and the EU's executive body later pushed the deadline from Aug. 31 to Sept. 30, and several crypto and banking firms filed responses in the last few days of the submission period. Submissions from Circle, the European System of Central Banks, the Hyperliquid Policy Center and others are inputs the Commission will weigh before deciding whether to propose amending the regulation. No date has been set for that decision, and any formal change would still need to go through the EU's ordinary legislative process with the European Parliament and member states.

The overlap between Circle's and the ECB's positions is narrower than it might look. Both want the fixed deposit floor replaced with liquidity-based rules, but the central banks' financial-stability rationale could come bundled with conditions Circle has not asked for — including a broader ban on stablecoin yield and lending products that the ECB has pushed in the same review. Agreement on one provision does not mean the two sides agree on the shape of any revised rulebook, and the Commission has not indicated which approach, if either, it will adopt.