Circle Calls for MiCA Overhaul as Compliance Rate Lags at 10%
Circle submitted an October 1 policy proposal to EU regulators urging changes to MiCA's stablecoin issuance and reserve requirements, citing data showing only 3 of the world's 30 largest stablecoins currently comply. The company argues the current ruleset creates barriers to market participation without proportionate safety gains.
Written by CoinArticle’s AI Newsroom · from 2 cited sources. How we work
Compliance Gap Spurs Circle's Intervention
Circle's EU policy director disclosed in the company's October 1 policy submission that only three of the 30 largest stablecoins worldwide meet MiCA's existing issuance and reserve criteria. That 10% compliance rate prompted Circle to formally petition EU policymakers to revise the framework's stablecoin rules, which have been in effect since December 2023.
The submission argues that the current requirements create operational barriers without achieving proportionate gains in financial stability. Circle did not name which stablecoins comply or which do not, leaving open the question of whether USDC — Circle's own dollar-backed stablecoin — is among the three compliant issuers.
Circle's Requested Changes
Circle's proposal centers on relaxing or clarifying MiCA's reserve composition and issuance authorization processes. The company contends that a framework designed to capture 100% of the market should not impose requirements that only 10% of major issuers can satisfy without restructuring their business models. The submission comes as EU regulators prepare to review MiCA's implementation and consider amendments.
Whether other stablecoin issuers share Circle's concerns remains unclear. No other major issuer has made a comparable public policy filing in recent weeks, though the review period for MiCA feedback typically extends several months.
Why It Matters
For Traders
Regulatory clarity on stablecoin reserves affects liquidity and redemption guarantees; MiCA amendments could expand or restrict which stablecoins operate on EU-based exchanges.
For Investors
A 10% compliance rate signals MiCA's current design is misaligned with market structure; revisions could either strengthen consumer protections or dilute them, reshaping stablecoin risk profiles.
For Builders
Stablecoin-dependent protocols and bridges may face switching costs if MiCA amendments change reserve or issuance requirements; builders should monitor the review timeline closely.
This article is for information only and is not financial advice. Read the full disclaimer.
