Stablecoin giants urge EU to revise MiCA

TLDR

Circle and Tether are pushing EU regulators to soften MiCA stablecoin rules, arguing that current bank-focused reserve requirements could harm stability and restrict access in Europe.

1. Circle and Tether jointly criticize MiCA rules that force significant stablecoins to keep large portions of reserves in commercial bank deposits and restrict cross-border multi-issuance.
2. If MiCA is not revised, the giants warn they may curb European activity, which could push users toward offshore tokens or smaller euro stablecoins and reshape on-chain liquidity in the EU.
3. The European Commission is already reviewing MiCA, but any changes will take time, so EU users should watch issuer announcements and national guidance rather than expect immediate rule relief.

Deep Dive

1. What Stablecoin Issuers Want Changed

Circle and Tether are unusually aligned in asking the EU to revise MiCAs reserve rules for significant fiat-referenced tokens. They oppose requirements that at least 30 percent of reserves sit in commercial-bank deposits, rising to 60 percent for larger tokens, arguing this concentrates risk in a handful of banks and exposes users if one fails.

Circle also wants more flexible treatment of foreign issuers and multi-issuance, where an EU entity co-issues a global stablecoin alongside a foreign-regulated partner. It proposes an equivalence regime that would let well-regulated non-EU issuers serve the market under EU oversight rather than full re-authorization, and it criticizes tight caps on single-sovereign and single-bank exposures as unnecessarily restrictive for high-quality government securities. These points are laid out in Circles MiCA review submission and summarized in recent coverage of its joint stance with Tether.

2. Why It Matters For EU Stablecoin Users

Under current MiCA interpretation, Circle has pursued EU compliance for USDC while Tether has stayed outside the regime, citing the deposit rules as a key obstacle. Both warn that if bank-deposit and multi-issuance constraints stay in place, they may need to restructure reserves, limit European distribution, or even avoid the regulated EU market, which would reduce access to the largest dollar stablecoins for some users.

At the same time, European firms are promoting euro-pegged tokens like EURP and EURC under MiCA and local e-money rules, highlighting a policy goal of on-chain euro usage. If MiCA remains strict for dollar tokens but friendlier to euro issuers, EU crypto activity could tilt further toward euro stablecoins and locally authorized platforms, changing liquidity patterns for trading and DeFi.

3. MiCA Review And What To Watch Next

The European Commission is already running a MiCA review consultation, with ESMA recommending changes around supervision, marketing standards and stablecoin safeguards. The consultation closed at the end of September, and any revisions now move into the slow process of drafting proposals and potential legislation.

In the near term, MiCAs existing rules continue to apply. Practical signals for users will be: 1) public guidance from ESMA and national regulators on how strictly they interpret bank-deposit and multi-issuance rules; 2) announcements from Circle, Tether and major exchanges about service changes for EU residents; and 3) growth or stagnation in regulated euro stablecoins relative to offshore dollar tokens.

Conclusion

Circle and Tethers joint push to revise MiCA is a warning that Europes current stablecoin rules may be too bank-centric and inward-looking to accommodate the largest global issuers. Whether regulators loosen or reinforce these constraints will shape which stablecoins remain practical in the EU, how much activity migrates offshore, and how quickly euro-based tokens can become credible alternatives on-chain. For now, the rules stand, so the key edge is staying ahead of issuer and regulator updates that signal how accessible major stablecoins will be in Europe over the next few years.