BRUSSELS, Belgium – In a significant move for Europe’s digital finance landscape, global financial technology firm Circle has formally called on the European Commission to revise proposed cryptocurrency thresholds, arguing current limits could severely restrict the growth of euro-denominated stablecoins and institutional market participation. The company submitted detailed feedback on March 20, 2026, targeting the Commission’s newly proposed Market Integration Package, a policy initiative designed to strengthen the European Union’s capital markets.
Circle Challenges EU’s Proposed Crypto-Asset Thresholds
Circle’s intervention centers on specific provisions within the MIP that relate to the Central Securities Depositories Regulation. The firm contends that the proposed market capitalization thresholds for classifying ‘significant’ e-money tokens create a structural barrier. According to Circle, no euro-denominated EMT, including its own MiCA-compliant EURC stablecoin, currently meets the proposed cap for use in settlement. This situation, the company warns, creates a problematic ‘chicken-and-egg’ dynamic that stifles the very growth the regulations aim to foster.
Furthermore, Circle praised the MIP as a meaningful step toward a digitally enabled financial system. However, the company outlined several critical areas needing improvement to ensure the framework’s success. The feedback arrives as the European financial sector continues to adapt to the Markets in Crypto-Assets Regulation, which became fully applicable in December 2024. MiCA itself has faced criticism for complexity and inconsistent implementation across member states, highlighting the need for complementary, clear legislation.
The Core Issue: Market Cap Thresholds and Liquidity
The debate hinges on how regulators define a ‘significant’ e-money token eligible for certain financial activities, particularly settlement. Circle’s analysis suggests the current proposed thresholds are misaligned with market reality for euro assets. Consequently, the company advocates for more adaptive criteria.
- Dynamic Assessment: Thresholds should consider real-time market uptake and liquidity conditions.
- Supervisory Flexibility: Regulators should conduct ongoing assessments rather than rely on static caps.
- Growth Enablement: Rules must allow nascent euro stablecoins to achieve the scale needed for institutional use.
Circle explicitly stated that restricting settlement to only ‘significant’ EMTs risks excluding all euro-denominated options. This exclusion, in turn, limits institutional participation and hampers the development of deep secondary market liquidity. The firm’s position underscores a central tension in crypto regulation: balancing consumer protection with innovation and market development.
Expert Perspectives on MiCA and Market Evolution
Legal experts have previously noted challenges with the existing regulatory landscape. For instance, Yuriy Brisov, a partner at Digital & Analogue Partners, has publicly argued that MiCA is difficult to interpret and that its application varies significantly between EU countries. This lack of uniformity creates legal uncertainty for cross-border crypto services. The MIP, therefore, represents an opportunity to provide much-needed clarity, particularly around which crypto-assets can serve as collateral in traditional finance operations.
The timeline of EU crypto regulation is crucial for context. Following MiCA’s passage, the European Commission began developing supplementary measures like the MIP to address specific market integration issues. Circle’s feedback is part of this ongoing legislative refinement process, where industry stakeholders provide technical input to shape workable rules.
Expanding Access: The DLT Pilot Regime and EURC
Beyond threshold arguments, Circle’s submission addressed the Distributed Ledger Technology Pilot Regime. The company argued the current proposal unnecessarily restricts cash account access to credit institutions and central securities depository financial institutions. Circle recommends expanding this access to include licensed crypto-asset service providers. Such a change would foster greater experimentation and integration between traditional and blockchain-based finance.
This recommendation aligns with Circle’s strategic goal to expand its euro-backed stablecoin, EURC, within the region. While its flagship USDC dominates the dollar stablecoin market, EURC’s growth is pivotal for a balanced digital currency ecosystem in Europe. The company notes that adaptive regulation is essential for EURC and similar projects to reach the scale required for widespread institutional adoption.
| Regulation/Initiative | Key Purpose | Status (as of March 2026) |
|---|---|---|
| Markets in Crypto-Assets (MiCA) | Comprehensive framework for crypto-asset issuance and service provision | Fully applicable since December 2024 |
| DLT Pilot Regime | Sandbox for testing DLT in financial market infrastructures | Operational, under review for expansion |
| Market Integration Package (MIP) | Strengthen EU capital markets, incl. digital asset integration | Proposal stage, under consultation |
| Central Securities Depositories Regulation (CSDR) Review | Update settlement rules to potentially include crypto-assets | Under amendment via MIP |
Conclusion: A Pivotal Moment for EU Finance
Circle concluded its feedback by framing the MIP as a pivotal moment for the European Union to modernize its financial system. The company advocates for clear and proportionate regulation that connects traditional finance with blockchain infrastructure. According to Circle, this approach will unlock new levels of efficiency, liquidity, and innovation within the region. The outcome of this consultation will significantly influence whether Europe can cultivate a competitive digital asset market alongside its robust traditional finance sector. The European Commission’s response to this and other industry feedback will shape the final legislation, determining the practical realities of EU crypto regulation for years to come.
FAQs
Q1: What is the Market Integration Package (MIP)?
The Market Integration Package is a policy initiative from the European Commission aimed at strengthening the EU’s capital markets. It includes proposals to update financial rules, some of which pertain to the integration of crypto-assets and distributed ledger technology into traditional market infrastructure.
Q2: Why is Circle concerned about e-money token thresholds?
Circle argues the proposed market capitalization thresholds for ‘significant’ e-money tokens are currently too high. No euro-denominated stablecoin meets them, which could prevent these tokens from being used for settlement and stifle their growth and institutional adoption from the outset.
Q3: What is the DLT Pilot Regime?
The DLT Pilot Regime is a regulatory sandbox in the EU that allows market participants to test the use of distributed ledger technology in trading and settlement of financial instruments under temporary exemptions from some standard rules. Circle wants it expanded to include more types of firms.
Q4: How does this relate to the existing MiCA regulation?
MiCA is the EU’s main comprehensive crypto law, in effect since late 2024. The MIP proposals, including the threshold rules Circle is commenting on, are separate legislative acts that would work alongside MiCA, often amending other financial regulations like the CSDR to accommodate crypto-assets.
Q5: What is Circle’s EURC stablecoin?
EURC is a euro-backed stablecoin issued by Circle that is designed to be fully compliant with the EU’s MiCA regulation. It is a digital currency pegged 1:1 to the euro, intended for use in digital payments and finance within Europe.
Updated insights and analysis added for better clarity.
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