Circle urges EU to drop fixed bank deposit rules for stablecoin reserves in MiCA review - Pluang

Circle has asked European Union policymakers to reconsider the fixed bank deposit requirements for stablecoin reserves as part of the ongoing review of the Markets in Crypto-Assets (MiCA) framework. The company's position centres on the idea that mandating a set proportion of reserves to be held in bank deposits may be unnecessarily rigid, potentially limiting how issuers manage liquidity and risk.

The debate matters because reserve rules sit at the heart of stablecoin credibility. Under MiCA, issuers must meet strict requirements on how reserves backing tokens are held and safeguarded. If those rules are seen as too prescriptive, issuers may argue they raise costs or reduce flexibility; if they are loosened, regulators may worry about weakening consumer protection and financial stability.

For markets, the key watchpoints are how EU authorities respond to such industry feedback, whether the review leads to any change in the deposit ratio, and how other jurisdictions position themselves. Any shift could influence where stablecoin issuers choose to operate and how they structure reserves.