Key Highlights
- Circle delivered formal comments to the European Commission regarding the Market Integration Package on March 20
- The company advocates for reduced market capitalization requirements for e-money tokens in settlement operations
- Current regulations exclude all euro-backed EMTs, such as EURC, from qualifying for settlement use
- Circle proposes market-responsive thresholds that adjust according to real-time conditions instead of static limits
- The company requests expanded DLT Pilot Regime participation to include crypto-asset service providers alongside traditional banks
Circle has communicated to European authorities that proposed cryptocurrency settlement regulations contain excessive limitations that may impede institutional engagement in tokenized financial markets.
The stablecoin provider delivered its formal feedback on March 20 regarding the European Commission’s Market Integration Package — an extensive regulatory framework 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 achieving practical effectiveness.
🚨 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 application in securities settlement processes. The current framework permits only “significant” EMTs for cash-leg settlement — a designation determined by market capitalization benchmarks.
Circle noted that every euro-denominated EMT, including its EURC stablecoin, remains far from satisfying that benchmark. EURC currently trades at $1.16.
Addressing the Circular Constraint
Circle characterized the scenario as a fundamental obstacle. When tokens require a specific size threshold before settlement eligibility, yet cannot achieve that scale without settlement utility, the regulatory structure generates a self-reinforcing limitation to expansion.
“Restricting settlement to ‘significant’ EMTs risks excluding euro-denominated EMTs,” Circle stated, emphasizing that the thresholds represent a “structural barrier to institutional participation and secondary market liquidity.”
As a solution, Circle recommends the Commission implement “adaptive” thresholds — mechanisms connected to practical metrics such as market adoption and liquidity dynamics — rather than fixed limits requiring comprehensive legislative revisions.
The organization also identified regulatory timing as problematic. Circle encouraged authorities to accelerate modifications independent of the wider legislative schedule, reinforcing concerns from tokenization companies last month that procedural delays might redirect operations toward the United States, where blockchain-based market infrastructure progresses more rapidly.
DLT Pilot Framework and Collateral Standards
Beyond settlement benchmarks, Circle challenged the DLT Pilot Regime’s current configuration. The present proposal restricts cash accounts within the framework to credit institutions and central securities depositories.
Circle advocates for expansion to encompass crypto-asset service providers, contending the existing arrangement introduces avoidable complications and operational obstacles.
The company further requested enhanced clarity surrounding stablecoin usage as collateral, referencing parallel initiatives underway in the United States and United Kingdom.
Regarding supervisory structure, Circle recommended a more targeted approach for centralized EU-level monitoring. The company suggested ESMA concentrate on substantial, cross-border entities, while smaller operators remain under national regulatory authority.
The primary European Union cryptocurrency legislation continues to be the Markets in Crypto-Assets Regulation (MiCA), which became operational in December 2024. MiCA has faced scrutiny from certain legal professionals who describe it as challenging to interpret and enforced unevenly across member nations.
Circle’s EURC represents a MiCA-compliant euro-backed 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 conventional finance with blockchain technology, emphasizing that refined, balanced regulation would enhance operational efficiency and market liquidity across the region.
