Circle, the issuer of USDC and EURC, submitted a formal response to the European Commission regarding the MiCA regulation review on October 1, 2026. The company proposes replacing mandatory bank-deposit minimums with flexible, liquidity-based reserve requirements to better manage redemption risks.
Current MiCA rules require issuers of electronic money tokens to hold at least 30% of reserves in commercial bank deposits, with the threshold rising to 60% for significant tokens. Circle argues that these fixed requirements could create systemic pressure on banks during periods of high redemption volume.
The proposal aligns with suggestions from the European Central Bank and the European System of Central Banks, which recommended shifting to liquidity-based metrics on September 22, 2026. Circle also advocates for multi-issuance models and an equivalence regime for foreign issuers to maintain competitiveness within the EU.
Since the implementation of MiCA, approximately 30 electronic money tokens have received authorization. Among the top 25 to 30 stablecoins globally, only three—USDC, EURC, and USDG—currently comply with the regulation. EURC circulation has reached approximately €400 million, marking a year-over-year increase of over 100%.
