Circle urges EU to revise stablecoin reserve rules in MiCA review

Circle wants the EU to replace mandatory bank-deposit minimums with more flexible liquidity rules and preserve cross-border stablecoin issuance.

Stablecoin issuer Circle urged the European Commission to revise reserve requirements in its response to a consultation on reviewing the Markets in Crypto-Assets Regulation (MiCA).

In Thursday’s summary of its response, the USDC and EURC issuer said mandatory bank-deposit requirements expose stablecoin issuers to banking-sector credit and counterparty risks.

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.

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