Circle is pressing EU policymakers to loosen parts of MiCA, arguing that the current stablecoin rules are too rigid for a market that moves across borders by design.
- Circle says only a small slice of major stablecoins fits MiCA
- Reserve rules and issuance structures are the main targets
- The company wants a path for foreign-regulated stablecoins
- Hyperliquid is pushing a separate MiCA-related derivatives argument
On Oct. 1, Circle submitted its response to the European Commission’s MiCA review consultation and argued that Europe should not box stablecoins into a framework that is too narrow to handle global issuance. Patrick Hansen, Circle’s director of EU strategy and policy, said “only 3 of the top 30 are MiCA-compliant today”, a blunt reminder that compliance rules can look tidy on paper while covering only a sliver of the market in practice. Circle’s push also mirrors the broader complaints in Circle urges MiCA changes as only 3 of top 30 stablecoins, where the mismatch between regulation and market reality is laid out in plain English.
The three compliant stablecoins named by Circle are USDC, USDG, and EURC. That is a small club for a regime that was supposed to bring order to Europe’s stablecoin market, though “order” and “broad adoption” are not always the same thing. Regulators often get one and then act surprised when they do not automatically get the other.
Circle’s own euro token, EURC, is the clearest example of how the company wants MiCA to work. Circle says EURC is MiCA-compliant, backed 100% by euro, and issued under a full-reserve model. Circle also says euro reserves are held at regulated financial institutions in the EEA and are covered by published monthly attestations. For the company’s own pitch, see Why Businesses Choose EURC.
That matters because stablecoins live or die by trust in the backing. If the reserves are solid, redemption is boring in the best possible way. If they are not, the whole thing becomes a very expensive confidence trick with a blockchain attached.
Circle says EURC is available on Avalanche, Base, Ethereum, Solana, and Stellar, and that Circle Mint customers can move between EUR and EURC. The company says the token is used for real-time FX, cross-border payments, store of value in euro, treasury, settlement, and DeFi activity such as borrowing and lending.
Circle has also said EURC has passed the €400 million mark in circulation, with one cited figure showing €402.4 million outstanding on Aug. 13. That does not make EURC a giant compared with the biggest dollar stablecoins, but it does show there is real demand for a regulated euro-denominated token rather than yet another crypto vanity project wearing a compliance costume. The trend has been tracked closely in MiCA Pushes EURC Activity Higher as Europe Favors Compliant, where the regulatory angle is doing more heavy lifting than the usual marketing fluff.
The larger point behind Circle’s submission is not just that EURC exists. It is that the company believes MiCA should allow stablecoins to scale without forcing them into rigid local structures that do not match how money actually moves online.
One of Circle’s main asks is to preserve cross-border issuance models, where a licensed European entity works alongside an affiliated issuer in another jurisdiction. Circle argues that restricting that setup would push European users toward offshore providers instead of keeping activity inside the EU’s rulebook. A broader breakdown of the company’s European strategy can also be seen in Circle’s EURC Wins in Europe as USDC Faces New Stablecoin.
That warning is easy to dismiss if you imagine markets as obedient little policy diagrams. They are not. If a stablecoin is liquid, accepted, and easy to use elsewhere, people will find it. If Europe makes the compliant route too awkward, demand does not vanish. It migrates.
Circle pointed to the European Commission’s 2020 impact assessment, which warned that excluding foreign stablecoins could encourage purchases from offshore parties without MiCA protections. In other words, regulators already know the tradeoff: tighter rules may improve control, but they can also create a gap that users fill outside the bloc. The legal backdrop here is laid out in a more technical way in MiCA Explained: EU's Crypto Regulation.
The reserve rules are where the argument gets especially sharp. Circle wants policymakers to revisit MiCA’s requirement that e-money token issuers keep at least 30% of backing assets in commercial bank deposits. For significant issuers, that threshold rises to 60%.
Circle also challenged European Banking Authority technical standards that impose a 35% ceiling on exposure to a single sovereign issuer and a separate rule tying deposits at each banking counterparty to 1.5% of that bank’s total assets. The EBA’s own response document is available here: I'm sorry, but it seems there is no HTML content provided.
The company’s point is simple: fixed deposit minimums and concentration caps can create their own risk, especially if stablecoin reserves are forced too heavily into banks. Regulators have the opposite concern: if reserves are too loose or too exotic, stablecoin backing becomes harder to supervise and easier to game. Both sides have a case. That is why the fight is still on.
Circle is also pushing for a recognition route for foreign-regulated stablecoins. Under the proposal described in the notes, the European Commission would assess the foreign regulatory framework, and the European Banking Authority would decide whether to recognize the individual issuer.
Circle says the idea draws on the U.S. GENIUS Act foreign-issuer framework, which the notes describe as requiring a comparable supervisory regime, registration with the Office of the Comptroller of the Currency, reserve holdings at a U.S. financial institution, acceptance of U.S. enforcement jurisdiction, and compliance with reporting and examination requirements. The broader policy idea is obvious even if the legal plumbing differs: if a foreign issuer is already under a serious supervisory regime, regulators may not need to pretend it is starting from zero.
That is where MiCA starts to look less like a simple yes-or-no crypto rule and more like a test of what kind of market Europe wants to host. A tightly controlled local system is easier to police. A more open system may attract better liquidity, more serious issuers, and more practical use. You usually do not get both without compromise.
Separately, Hyperliquid Policy Center submitted comments on the MiCA review focused on perpetual futures, which are derivatives contracts with no expiration date. Hyperliquid argues they should remain under MiFID II because they are derivatives no matter how the records are kept, and it opposes applying contracts for difference rules to markets that use transparent central limit order books.
That may sound like a different fight, but the pattern is familiar. Crypto firms keep telling regulators the same thing in slightly different accents: judge the product by what it does, not by whether it lives onchain. They also want supervisors to recognize information already visible on public blockchain records instead of layering on redundant reporting just because the old system likes paperwork.
There is a real policy question underneath all of this. MiCA was built to bring structure to Europe’s crypto market, and it has done that. But structure can become friction if the rules are so specific that only a few issuers can fit through the door. Circle’s complaint is not that Europe should have no guardrails. It is that the guardrails may be narrowing the road more than necessary.
If you want the regulatory context behind that critique, Fit for Purpose? European Commission Launches Review helps explain why policymakers are even revisiting the framework in the first place.
That is not a plea for chaos. It is a demand for a framework that can handle global stablecoins without pretending they are local oddities. Europe can choose a system that is cleaner on paper, or one that is more competitive in practice. Those are not always the same thing.
For readers trying to keep track of the EU’s plumbing, the About Interim MiCA Register page is the dry-but-useful reference point for the current regulatory machinery, which is often where the real action hides while everyone else argues about buzzwords.
A practical comparison with the market’s commercial side can be found in Circle’s EURC Dominates Europe’s Stablecoin Market, which asks the uncomfortable question of whether this is innovation winning or regulation quietly selecting the winners.
Key questions and takeaways
-
How many major stablecoins does Circle say are MiCA-compliant?
Circle’s Patrick Hansen said only 3 of the top 30 are compliant today. The named tokens are USDC, USDG, and EURC. -
Why is Circle pushing for changes to MiCA?
Circle says the rules are too restrictive for stablecoins that are meant to move globally. Its concern is that tight issuance and reserve rules could push users toward offshore providers instead of regulated EU options. -
What is Circle asking to change on reserves?
Circle wants the EU to reconsider the 30% commercial bank deposit rule, the 60% rule for significant issuers, and the related concentration limits. The company argues those requirements may create unnecessary banking exposure and operational friction. -
Why does EURC matter in this debate?
EURC is Circle’s proof that a MiCA-style stablecoin can be built and used in Europe. Circle says it is fully euro-backed, supported by monthly attestations, and used for payments, FX, settlement, treasury, and trading. -
What is the point of a recognition route for foreign stablecoins?
It would let Europe evaluate stablecoins issued under other serious regulatory regimes instead of forcing every issuer into a purely local setup. Circle wants that path to be formal, transparent, and supervised. -
Why does Hyperliquid come up here?
Hyperliquid is making a separate but related argument: crypto derivatives like perpetual futures should be treated according to their economic function under MiFID II, not forced into rules designed for a different market structure.
Circle’s position is basically this: stablecoins are global instruments, and Europe should regulate them without turning the market into a compliance museum. MiCA has brought order, but the next question is whether it will also leave enough room for real liquidity, real use, and issuers that can actually operate at scale.
