Key Takeaways
- On March 20, Circle delivered formal comments to the European Commission regarding its Market Integration Package proposal
- The stablecoin issuer advocates for reduced market capitalization requirements for e-money tokens in settlement operations
- Currently, no euro-backed EMT—including Circle’s EURC—satisfies the established threshold criteria
- Circle proposes “adaptive” threshold mechanisms linked to market dynamics instead of rigid numerical limits
- The company advocates for crypto-asset service providers to access DLT Pilot Regime cash accounts alongside traditional banks
Stablecoin giant Circle has warned European policymakers that their draft regulations governing crypto settlement are overly stringent and may impede institutional embrace of tokenized financial markets.
On March 20, the digital currency issuer delivered its formal feedback on the European Commission’s Market Integration Package—an expansive regulatory blueprint aimed at consolidating and strengthening capital markets throughout the European Union.
Circle acknowledged the MIP as a “meaningful step toward a digitally enabled financial system” while emphasizing that multiple provisions require refinement before becoming operationally effective.
🚨 CRYPTO: CIRCLE PUSHES EU TO FAST-TRACK DLT REFORMS AND EXPAND STABLECOIN SETTLEMENT RULES@circle just told European regulators to move faster or lose the race to the U.S.
In formal feedback submitted March 20 on the European Commission’s Market Integration Package, Circle… pic.twitter.com/xHPGTkdeJD
— BSCN (@BSCNews) March 23, 2026
The primary concern centers on e-money tokens and their permitted role in securities settlement processes. According to current draft proposals, only EMTs classified as “significant” would qualify for cash-leg settlement—a designation determined by market capitalization benchmarks.
Circle highlighted that no euro-based EMT, including its proprietary EURC stablecoin, currently approaches that benchmark. EURC trades at approximately $1.16.
Regulatory Catch-22 Stifles Growth
Circle characterized the framework as creating an inherent obstacle. When tokens cannot participate in settlement operations until achieving substantial scale, yet cannot scale without settlement participation, the regulation establishes a self-perpetuating constraint that blocks market development.
“Restricting settlement to ‘significant’ EMTs risks excluding euro-denominated EMTs,” Circle stated, characterizing the thresholds as a “structural barrier to institutional participation and secondary market liquidity.”
As a remedy, Circle recommends that the Commission implement “adaptive” threshold frameworks—mechanisms calibrated to actual market conditions such as adoption rates and liquidity metrics—instead of fixed benchmarks requiring complete legislative revision to modify.
The firm also identified regulatory speed as a critical issue. It encouraged authorities to accelerate reforms independently of the broader legislative schedule, reinforcing concerns voiced by tokenization companies last month that procedural delays might redirect innovation toward the United States, where blockchain-based market infrastructure is advancing more rapidly.
Expanding DLT Pilot Access and Collateral Clarity
Beyond settlement threshold concerns, Circle critiqued the DLT Pilot Regime’s current configuration. As drafted, cash accounts within this regime would be restricted to credit institutions and central securities depositories exclusively.
Circle advocates for broadening eligibility to encompass crypto-asset service providers, contending that the present limitations introduce avoidable operational friction and complexity.
The company further requested explicit guidance on employing stablecoins as collateral instruments, referencing parallel regulatory developments underway in both the United States and United Kingdom.
Regarding supervisory architecture, Circle recommended limiting centralized EU oversight scope. It proposed that ESMA concentrate on substantial, cross-border entities, while permitting smaller operators to remain under national regulatory authority.
The cornerstone of European Union crypto legislation remains the Markets in Crypto-Assets Regulation (MiCA), which became operational in December 2024. MiCA has faced criticism from certain legal practitioners who characterize it as challenging to interpret and inconsistently enforced across different member nations.
Circle’s EURC represents a MiCA-compliant euro-pegged stablecoin. The company’s primary offering continues to be USDC, presently valued at $1.
Circle described the MIP as a “pivotal moment” for the European Union to bridge traditional financial systems with blockchain technology, asserting that more transparent and balanced regulation would enhance operational efficiency and market liquidity throughout the region.
