Circle has formally requested that the European Commission amend reserve requirements under the Markets in Crypto-Assets Regulation (MiCA). The company argues that current rules mandating minimum bank deposits expose issuers to unnecessary credit and counterparty risks within the banking sector.
Current MiCA regulations require e-money token issuers to maintain at least 30% of their reserves in commercial bank deposits, with a 60% threshold for significant issuers. Circle proposes replacing these fixed minimums with more flexible liquidity requirements, a move that aligns with the position of the European Central Bank.
The issuer also advocates for the removal of specific concentration limits, including a 35% cap on exposure to a single sovereign and a ceiling on deposits with individual counterparties set at 1.5% of a bank's total assets. Additionally, Circle emphasized the importance of maintaining multi-issuance structures to prevent users from migrating to offshore providers.
The public consultation, which concluded on Wednesday, gathered feedback on the effectiveness of MiCA. Other industry participants also contributed, with the Hyperliquid Policy Center suggesting that crypto perpetual futures be regulated under the existing MiFID II framework, while the Global Blockchain Business Council called for clearer token classification and reduced regulatory duplication.
