Circle urges EU to drop fixed bank deposit rules for stablecoin reserves in MiCA review - Pluang

Circle has asked European Union policymakers to reconsider the fixed bank deposit requirements for stablecoin reserves as part of the ongoing review of the Markets in Crypto-Assets (MiCA) regulation. The company's position centers on the idea that rigid limits on how much of a stablecoin's reserves must be held in bank deposits may not reflect how modern reserve management actually works.

The debate matters because reserve rules directly affect how stablecoin issuers manage liquidity and risk. If regulations mandate a fixed share of deposits, issuers could face constraints in adjusting their reserve mix to changing market conditions. A more flexible framework, Circle argues, could allow reserves to be diversified across other high-quality, liquid assets while still protecting holders.

For markets, the outcome of this review could influence the operating costs and stability of euro-denominated and dollar-denominated stablecoins available in the EU. What to watch: how EU authorities weigh Circle's arguments against prudential concerns, and whether any revised rules change the compliance burden for issuers serving European users.