Stablecoin giants press EU to revise MiCA

TLDR

Circle and Tether are lobbying the European Union to ease MiCA stablecoin rules they say are too bank focused and could keep big tokens out of Europe.

1. Circle and Tether are jointly pushing to revise MiCAs bank deposit and reserve diversification requirements, and to recognize foreign regulated issuers under an equivalence regime.
2. The current rules apply mostly to EU e-money tokens, leaving many global dollar stablecoins outside MiCA and potentially reshaping which assets exchanges can legally offer to European users.
3. The European Commissions MiCA review and follow up work by ESMA and the EBA will determine whether the EU sticks with strict safeguards or opens the door to more flexible, issuer friendly structures.

Deep Dive

1. What Issuers Want

Circle (USDC) is urging the EU to amend MiCA so that qualifying foreign regulated issuers can be recognized rather than forced into full EU authorization, with the European Banking Authority vetting equivalence and individual issuers.Circles proposal would let a non EU-regulated stablecoin be co-issued in Europe through locally licensed partners.

Both Circle and Tether oppose MiCA rules that require at least 30% of reserves in commercial bank deposits and up to 60% for significant tokens, plus limits like a 35% cap on exposure to one sovereign and a 1.5% cap on deposits with a single bank relative to that banks assets.They argue these constraints increase bank counterparty risk and make it harder to use high quality government securities.

Tethers CEO Paolo Ardoino has flagged the same issues; Tether chose not to pursue an EU license under MiCAs current deposit rules, while Circle did obtain authorization and is now pushing for changes.

2. Why It Matters For Crypto Users

MiCAs full regime has now taken effect, and European supervisors say only a small fraction of the worlds largest stablecoins are actually regulated under it.Circle notes that just three of the top 25 global stablecoins qualify, despite around 30 EU e-money tokens being authorized.

If the EU keeps strict bank deposit and diversification rules, issuers may respond by restructuring reserves, limiting European access to certain tokens, or avoiding the market altogether.A recent analysis warns this could concentrate risk in a handful of EU banks and reduce choice for EU users.

On the other hand, regulators like ESMA and the European Systemic Risk Board have warned that multi issuer, cross border structures can escape effective EU supervision and may need tighter safeguards rather than looser ones.Their recommendations call for stronger oversight of third country schemes and clearer treatment of non compliant stablecoins.

3. What To Watch Next

The European Commission has launched a formal MiCA review consultation, which closed at the end of September; Circle and Tethers lobbying is aimed at influencing how that review translates into revised rules or guidance.Coverage of the review highlights possible changes to stablecoin, DeFi and marketing rules.

Supervisors ESMA and the EBA will be key: ESMA has already suggested tougher supervision and clearer enforcement for non compliant stablecoins, while the EBA has urged stronger safeguards against complex multi issuer structures.Circles counterproposal tries to thread the needle by keeping home country supervision while allowing EU distribution.

In the meantime, market behavior offers early signals. Some exchanges and payment platforms are adding euro stablecoins and MiCA compliant tokens, while others open conversion routes between USDT and USDC specifically for European users,reflecting the regulatory pressure.

Confidence: moderate the lobbying and proposals are well documented, but final policy outcomes remain uncertain.

Conclusion

Stablecoin giants are testing how far the EU will go in balancing systemic risk controls with market access and competition.

If regulators accept parts of Circle and Tethers proposals, more global stablecoins could come inside MiCAs perimeter, with reserves tilted toward sovereign debt rather than bank deposits. If they resist, European users may see a narrower, more bank centric stablecoin landscape and greater reliance on locally issued tokens, even as offshore markets continue to trade the biggest dollar coins freely.