Circle urges EU to drop MiCA bank-deposit mandate for stablecoin reserves

Circle on October 2 filed its response to the European Commission's MiCA review consultation, using the submission to challenge two of the regime's load-bearing stablecoin reserve rules: the mandatory floor on commercial bank deposits and the diversification caps that force significant e-money token issuers to hold reserves across dozens of counterparties. The consultation window closed September 30; the Commission is preparing a comprehensive MiCA overhaul for 2027.

What Circle is pushing back on

MiCA's current reserve architecture for e-money tokens (EMTs) requires issuers to hold a minimum of 30% of reserves in commercial bank deposits, rising to 60% for issuers classified as "significant." In parallel, the regime caps single-sovereign exposure at 35% of reserves and limits concentration at any one bank, which — Circle writes in its submission — forces large issuers to spread deposits across dozens of institutions.

Circle's position is that the structure "actually increases exposure to banking-sector credit risk" rather than reducing it, pointing to the March 2023 Silicon Valley Bank episode in which $3.3 billion of USDC reserves were briefly stranded in a failed bank. The firm asks the Commission to replace the fixed deposit floor with a more flexible minimum liquidity requirement that would let issuers hold reserves in high-quality liquid assets — short-dated sovereign paper, central-bank reverse repo — in place of bank deposits. The European Central Bank, Circle notes, has publicly questioned the same mandatory minimum.

The multi-issuance ask

The submission also presses the Commission to preserve the "multi-issuance" structure, under which globally circulating stablecoins are issued jointly by an EU-authorized MiCA entity and foreign-regulated affiliates. Circle recommends an equivalence and recognition regime for foreign-regulated stablecoins modeled on EMIR, CSDR and MiFIR — a route that would let MiCA-authorized tokens remain interoperable with their non-EU issuance under a single reserve pool.

By the numbers

Circle's filing cites a market-structure data point that frames the ask:

• Of the top 30 stablecoins by market cap globally, three comply with MiCA: USDC, USDG, EURC.
• MiCA's EMT reserve-floor regime therefore binds a small slice of global issuance and shapes European user access to the rest primarily through CASP de-listing.

The firm argues that keeping the top of the global stablecoin market outside Europe's perimeter is a policy outcome, not an inevitability, and that the reserve mandate is the single rule that most tightens that perimeter.

Who else filed

Circle was not alone in using the consultation to press for a rewrite of the EMT reserve rules. Hyperliquid Policy Center filed a parallel submission objecting to MiCA's treatment of perpetual futures, and multiple industry trade groups filed on behalf of their stablecoin members. The Commission has not yet released a consolidated list of respondents.

What to watch

1. The European Commission's own staff working document on the MiCA review, expected in Q1 2027, which will frame which of the consultation responses move into the legislative proposal.
2. The ESMA and EBA opinions that will accompany the review — the two authorities have joint technical responsibility for EMT reserve rules under MiCA.
3. Any ECB response: the central bank has publicly questioned the minimum deposit floor and may back Circle's liquidity-test alternative, or may push the other way on CBDC-adjacent arguments.
4. Positioning by MiCA-authorized issuers who built their reserve stack around the 30%-60% rule — a tilt toward a liquidity test benefits newer entrants more than it benefits incumbents.

Context

The pushback lands as MiCA begins its first mandated review, with implementation across the EU still bedding in. The regime's EMT reserve rules were drafted in 2022–2023 against the backdrop of the Terra collapse and SVB, and were designed to insulate stablecoin holders from both algorithmic and bank-run failure modes. Circle's argument is that the diagnosis was right and the prescription was wrong: SVB demonstrated the fragility of concentrated bank deposits, not their safety, and the right fix is more liquid assets, not more insured deposits.

Sources

• Circle, "Circle's Response to the European Commission's MiCA Review Consultation" (October 2, 2026).
• Decrypt, "Circle Pushes Back on MiCA's Bank-Deposit Mandate for Stablecoins" (October 2, 2026).
• The Block, "Hyperliquid Policy Center, Circle press EU on perps and stablecoin reserves in MiCA review" (October 1, 2026).