TLDR
- Circle submitted feedback to the European Commission on March 20 on its proposed Market Integration Package
- Circle wants lower market cap thresholds for e-money tokens (EMTs) to be used in settlement
- No euro-denominated EMT, including Circle’s own EURC, currently meets the existing threshold
- Circle is calling for “adaptive” thresholds tied to market conditions rather than fixed caps
- The firm also wants crypto-asset service providers included in DLT Pilot Regime cash accounts, not just banks
Circle has told European regulators that their proposed rules for crypto settlement are too restrictive and could hold back institutional adoption of tokenized markets.
The stablecoin issuer submitted its response on March 20 to the European Commission’s Market Integration Package — a wide-ranging policy initiative designed to strengthen capital markets across the EU.
Circle called the MIP a “meaningful step toward a digitally enabled financial system” but was clear that several areas need work before the rules can function well in practice.
🚨 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 core issue is around e-money tokens and their use in securities settlement. Under the current proposals, only “significant” EMTs would be permitted for cash-leg settlement — a classification tied to market capitalization thresholds.
Circle said that no euro-denominated EMT, including its own EURC stablecoin, is close to meeting that threshold. EURC is currently priced at $1.16.
A Chicken-and-Egg Problem
Circle described the situation as a structural barrier. If tokens can’t be used in settlement until they reach a certain size, but they can’t grow large enough without being used in settlement, the framework creates a loop that prevents growth.
“Restricting settlement to ‘significant’ EMTs risks excluding euro-denominated EMTs,” Circle said, adding that the thresholds are a “structural barrier to institutional participation and secondary market liquidity.”
To fix this, Circle is asking the Commission to adopt “adaptive” thresholds — ones tied to real-world factors like market uptake and liquidity conditions — rather than static caps that require full legislative updates to change.
The company also flagged the pace of reform as a concern. It urged regulators to fast-track changes outside the broader legislative timeline, echoing warnings from tokenization firms last month that delays could push activity toward the U.S., where onchain market infrastructure is moving faster.
DLT Pilot Regime and Collateral Rules
Beyond settlement thresholds, Circle took aim at the DLT Pilot Regime as currently structured. Under the existing proposal, cash accounts within the regime are limited to credit institutions and central securities depositories.
Circle wants that expanded to include crypto-asset service providers, arguing the current setup adds unnecessary friction and complexity.
The firm also called for clearer rules on using stablecoins as collateral, pointing to ongoing efforts in the U.S. and UK on the same front.
On supervision, Circle pushed for a narrower scope for centralized EU-level oversight. It suggested ESMA focus on large, cross-border firms, while smaller players stay under national regulators.
The main piece of EU crypto legislation remains the Markets in Crypto-Assets Regulation (MiCA), which took effect in December 2024. MiCA has drawn criticism from some legal experts who say it is difficult to interpret and applied inconsistently across member states.
Circle’s EURC is a MiCA-compliant euro-backed stablecoin. Its flagship product remains USDC, currently priced at $1.
Circle said the MIP is a “pivotal moment” for the EU to connect traditional finance with blockchain infrastructure, and that clearer, more proportionate regulation would improve efficiency and liquidity in the region.
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