Key Takeaways
- On March 20, Circle provided formal feedback to the European Commission regarding its Market Integration Package proposal
- The company advocates for reduced market capitalization thresholds enabling e-money tokens in settlement systems
- Currently, no euro-backed EMT, including Circle’s EURC stablecoin, satisfies the existing threshold requirements
- Circle proposes implementing “adaptive” thresholds that respond to market dynamics instead of rigid limits
- The company requests that crypto-asset service providers gain access to DLT Pilot Regime cash accounts, expanding beyond traditional banks
Circle has communicated to European policymakers that their proposed cryptocurrency settlement framework imposes excessive restrictions that may impede institutional acceptance of tokenized financial markets.
The digital currency issuer delivered its official commentary on March 20 addressing the European Commission’s Market Integration Package — an extensive regulatory proposal aimed at consolidating 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 practical implementation can succeed.
🚨 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 central concern revolves around e-money tokens and their application in securities settlement processes. According to current proposals, exclusively “significant” EMTs would qualify for cash-leg settlement operations — a designation determined by market capitalization benchmarks.
Circle indicated that no euro-denominated EMT, including its proprietary EURC stablecoin, approaches the established threshold. EURC currently trades at $1.16.
Regulatory Catch-22 Emerges
Circle characterized the circumstances as an inherent obstacle. When tokens cannot participate in settlement until achieving specific size requirements, yet cannot expand sufficiently without settlement integration, the regulatory structure generates a circular impediment to development.
“Restricting settlement to ‘significant’ EMTs risks excluding euro-denominated EMTs,” Circle stated, noting that these thresholds represent a “structural barrier to institutional participation and secondary market liquidity.”
As a remedy, Circle recommends the Commission embrace “adaptive” thresholds — parameters calibrated to practical considerations such as market adoption rates and liquidity environments — rather than inflexible caps demanding comprehensive legislative revisions to modify.
The organization additionally highlighted the speed of regulatory reform as problematic. It encouraged authorities to accelerate modifications independent of the extended legislative calendar, reinforcing concerns from tokenization companies last month that postponements might redirect business toward the United States, where blockchain-based market infrastructure advances more rapidly.
DLT Pilot Framework and Collateral Guidelines
Extending beyond settlement benchmarks, Circle criticized the DLT Pilot Regime in its present configuration. Under the existing framework, cash accounts within the pilot program remain restricted to credit institutions and central securities depositories.
Circle advocates for broadening this access to encompass crypto-asset service providers, contending the present arrangement introduces avoidable complications and operational inefficiencies.
The company further requested more explicit guidelines regarding stablecoin utilization as collateral, referencing parallel initiatives underway in both the United States and United Kingdom.
Concerning regulatory supervision, Circle recommended a more limited scope for centralized EU-level monitoring. It proposed ESMA concentrate on substantial, cross-border entities, while permitting smaller operators to remain under domestic regulatory authorities.
The primary EU cryptocurrency legislation continues to be the Markets in Crypto-Assets Regulation (MiCA), which became operational in December 2024. MiCA has faced criticism from certain legal professionals who characterize it as challenging to interpret and inconsistently enforced across member nations.
Circle’s EURC represents a MiCA-compliant euro-denominated stablecoin. Its primary offering continues to be USDC, presently valued at $1.
Circle described the MIP as a “pivotal moment” for the European Union to integrate conventional finance with blockchain technology, emphasizing that transparent, balanced regulation would enhance operational efficiency and market liquidity throughout the region.
