Circle wants EU to ease MiCA bank deposit rules for stablecoins
Circle has urged the European Commission to remove fixed bank deposit requirements for stablecoin reserves as the EU reviews its Markets in Crypto Assets regulation. SummaryCircle urged the European Commission to reconsider MiCA rules requiring stablecoin issuers to hold at least 30% of reserves in commercial bank deposits, rising to 60% for significant issuers.The USDC issuer backed replacing fixed deposit thresholds with liquidity requirements, aligning with a similar proposal from the European Central Bank.Circle argued mandatory deposits expose issuers to banking risks, pointing to its experience when $3.3 billion of USDC reserves became caught up in the Silicon Valley Bank collapse.The company wants the EU to preserve multi issuance arrangements that allow regulated entities inside and outside the bloc to jointly issue the same stablecoin. Circle said in its response to the Commissions MiCA consultation that forcing e money token issuers to keep a set portion of their reserves at commercial banks leaves them exposed to credit and counterparty risks in the banking system. Current rules require regular e money token issuers to keep at least 30% of their reserves in commercial bank deposits. For stablecoins classified as significant, the minimum rises to 60%. The USDC and EURC issuer backed replacing those thresholds with
