In its submission to the EU's review of its crypto law, Circle backed replacing a bank-deposit floor for reserves with a liquidity requirement. It opposes a push by central banks to widen a ban on paying interest to stablecoin holders.
Crypto · FinancialMarkets.com · October 2, 2026 · Tickers: CRCL, COIN
The rules that decide how dollar stablecoins operate in Europe are open for revision, and Circle has filed its list of changes.
In its response to the European Commission's consultation on the Markets in Crypto-Assets Regulation, published Thursday, Circle asked Brussels to rewrite how stablecoin reserves are held. The consultation closed on Sept. 30.
The reserve rules
MiCA requires issuers of e-money tokens, the category that covers stablecoins such as Circle's USDC and EURC, to keep at least 30% of reserves as bank deposits, or 60% for tokens designated significant. Circle argued that the floor leaves reserves more exposed to the health of individual banks, and said it concurs with the ECB that the requirement should be reconsidered and replaced by a liquidity requirement.
Circle also asked the Commission to remove a 35% cap on holdings of any one government's debt, which it said prevents dollar tokens from holding mainly U.S. Treasurys. And it asked for removal of a rule limiting deposits at any one bank to 1.5% of that bank's assets.
Circle also asked the Commission to preserve multi-issuance, under which the same token can be issued inside and outside the EU, and separately to recognize equivalent foreign regimes, an approach it said mirrors the U.S. GENIUS Act.
The yield fight
On interest, Circle is on the other side. The ECB and national central banks have pressed to extend MiCA's ban on stablecoin issuers paying interest so that it also covers lending, borrowing and staking. Circle and Aave Labs oppose the change, and more than 50,000 EU citizens have petitioned to allow rewards on stablecoins.
An extended ban would reach decentralized-finance protocols where stablecoin holders earn returns by lending tokens out.
The stakes for issuers
The reserve and yield questions shape different parts of the business. Reserve rules decide what issuers can earn on the assets backing their tokens, since the mix of bank deposits and government debt sets that return. Yield rules decide whether holders can earn returns in Europe through third-party protocols, which affects demand for the tokens.
Circle shares were down about 2.5% on Friday afternoon, with no clear link to the filing.
Next
The Commission's legislative proposal following the consultation is the next document. Its treatment of the bank-deposit floor and the scope of the interest ban will show which arguments prevailed.