Circle Challenges MiCA’s Bank-Deposit Rule for Stablecoin Reserves

MiCA's bank-deposit mandate — Circle, the issuer of the USDC stablecoin, has formally objected to a key provision in the European Union’s Markets in Crypto-Assets (MiCA) regulation that mandates stablecoin reserves be held as bank deposits.

The company argued in a submission to the European Commission that the current reserve and concentration requirements effectively lock the world’s largest stablecoins out of the European market. Circle contends that the rules are too restrictive and do not align with global standards for managing reserve assets.

In its feedback, Circle sided with the European Central Bank, which has also called for more flexible reserve rules. The ECB previously warned that overly rigid mandates could hinder the development of a digital euro and limit consumer choice.

The pushback highlights a significant industry concern as the EU finalizes its landmark crypto framework. Stablecoin issuers are seeking clarity and workable rules that allow for safe, liquid reserve management without forcing exclusive reliance on the traditional banking system.