Circle Urges EU to Ease Stablecoin Thresholds

Close-up of a digital token labeled "USDC" surrounded by EU flag stars on a dark background.

Circle Urges European Commission to Lower Crypto Thresholds – Proposal Targets Stablecoin Use in EU Market Integration Framework

Key Takeaways

Circle submitted feedback to the European Commission on March 20 regarding the proposed Market Integration Package.
The company asked for lower market capitalization thresholds for euro-denominated e-money tokens used in settlement.
Circle stated that no euro-denominated e-money token, including its EURC stablecoin, meets the proposed threshold.
The firm also called for reforms to the DLT Pilot Regime to allow more crypto-asset service providers to participate.

Circle Responds to the EU Market Integration Package

Circle has formally provided feedback to the European Commission on elements of its proposed Market Integration Package, a broad policy initiative designed to strengthen capital markets across the European Union. The company confirmed that it submitted its response on March 20.

In its statement, Circle described the proposals as a meaningful step toward a digitally enabled financial system. At the same time, the company identified specific areas where it believes adjustments are necessary to improve the practical integration of crypto-assets into European financial infrastructure.

The Market Integration Package, referred to as the MIP, aims to further connect and modernize EU capital markets. According to Circle, clearer guidance within this framework could help define which crypto-assets may be used as collateral and how digital instruments can interact with traditional financial systems.

Lower Thresholds Proposed for E-Money Tokens in Settlement

A central point in Circle’s feedback concerns the market capitalization thresholds applied to e-money tokens under the Central Securities Depositories Regulation. Under the current proposal, only so-called significant e-money tokens would qualify for use in settlement.

Circle argued that restricting settlement activity to significant e-money tokens creates structural barriers. The company stated that no euro-denominated e-money token is currently close to reaching the proposed market capitalization threshold. This includes EURC, Circle’s euro-backed stablecoin that complies with the EU’s Markets in Crypto-Assets Regulation.

According to Circle, limiting settlement eligibility to tokens that already meet a high market capitalization requirement risks excluding euro-denominated instruments altogether. The company described this situation as a chicken-and-egg scenario, where tokens cannot grow because they lack settlement use cases, while at the same time they cannot qualify for settlement because they have not yet reached sufficient scale.

Circle recommended that the European Commission adopt more adaptive thresholds. In its view, criteria such as market uptake and liquidity conditions, combined with supervisory assessments, would provide a more flexible approach than a fixed capitalization benchmark.

Implications for EURC and the European Stablecoin Market

Circle operates USDC as its flagship US dollar-backed stablecoin and also issues EURC, a euro-backed stablecoin that complies with MiCA, the EU’s Markets in Crypto-Assets Regulation. MiCA entered into force in December 2024 and serves as the primary legislative framework for crypto-assets within the European Union.

In its submission, Circle highlighted that no euro-denominated e-money token currently meets the proposed threshold for settlement use under the Market Integration Package. This directly affects the potential role of EURC in regulated settlement systems.

For market participants evaluating euro-backed stablecoins, the discussion around thresholds is relevant because it influences whether such tokens can be integrated into securities settlement processes. The ability to use e-money tokens in settlement may affect liquidity, institutional participation, and secondary market development, as Circle noted in its response.

Call to Expand the DLT Pilot Regime

Beyond market capitalization thresholds, Circle also addressed the DLT Pilot Regime within the proposed framework. The DLT Pilot Regime is intended to enable the use of distributed ledger technology in market infrastructures under a controlled regulatory environment.

According to Circle, the current proposal restricts cash accounts within the regime to credit institutions and central securities depository financial institutions. The company argued that this limitation should be expanded to include crypto-asset service providers.

Circle stated that allowing more crypto-asset service providers to operate within the DLT Pilot Regime would better connect blockchain-based infrastructure with traditional financial systems. The company framed this as part of a broader effort to modernize Europe’s financial architecture.

Regulatory Context Under MiCA

The Markets in Crypto-Assets Regulation took effect in December 2024 and represents the main crypto-specific legislative framework in the European Union. While MiCA establishes common rules for crypto-asset issuers and service providers, aspects of its implementation have been subject to criticism.

Some legal practitioners have argued that MiCA can be difficult to interpret and that its implementation may vary across EU member states. Within this regulatory landscape, the proposed Market Integration Package is positioned as an additional step toward clarifying how digital assets interact with established financial market rules.

Circle indicated that clearer definitions under the MIP regarding the use of crypto-assets as collateral could provide greater legal certainty for Europe-based market participants.

Our Assessment

Circle’s submission to the European Commission focuses on specific technical aspects of the proposed Market Integration Package, particularly market capitalization thresholds for e-money tokens and participation rules under the DLT Pilot Regime. The company stated that no euro-denominated e-money token currently meets the proposed threshold for settlement use, including its own EURC stablecoin. By recommending adaptive thresholds and broader access for crypto-asset service providers, Circle is seeking regulatory adjustments that would allow euro-backed stablecoins to participate more directly in EU settlement and market infrastructure frameworks.