Circle has asked the European Union to scrap the rule requiring stablecoin issuers to hold at least 30 percent of reserves as bank deposits, or 60 percent for issuers deemed significant, in its submission to the review of the MiCA crypto law. Submissions closed on 30 September after the deadline was extended from 31 August.
Circle, the largest issuer of e-money tokens authorised under MiCA, argued the deposit floor increases its exposure to the credit and counterparty risk of the banking sector.
It has reason to know. USDC briefly lost its peg in March 2023 when $3.3 billion of its reserves sat at Silicon Valley Bank.
It wants the floor replaced by maturity-based liquidity requirements. It also wants an end to a 35 percent cap on exposure to any single government and a 1.5 percent cap per bank, which it said would force it to spread reserves across dozens of banks. The ECB and the wider system of euro-area central banks also backed scrapping the deposit minimums, The Block reported.
The Hyperliquid Policy Center, the Washington group funded with HYPE tokens worth about $29 million, made its first filing outside the US. It asked that perpetual futures be regulated under existing MiFID II derivatives rules rather than MiCA, and kept distinct from contracts for difference, where the provider profits when clients lose. Deutsche Börse proposed a separate category of settlement tokens, and Chamber of Progress asked for rewards on e-money tokens to be allowed.
Only three of the 25 largest stablecoins are regulated under MiCA. The submissions show what the industry wants from Brussels; the Commission has not yet said what it is prepared to change, or when.
