Quick Summary
- Circle delivered its official feedback 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 processes
- Currently, no euro-backed EMT, including Circle’s EURC stablecoin, satisfies the proposed threshold criteria
- Circle proposes implementing dynamic thresholds that respond to market dynamics instead of rigid numerical limits
- The stablecoin issuer seeks to broaden DLT Pilot Regime cash account access to crypto-asset service providers beyond traditional banks
The prominent stablecoin provider has informed European policymakers that the draft regulations governing cryptocurrency settlement frameworks are overly restrictive and may impede institutional embrace of tokenized financial markets.
On March 20, the digital currency company delivered its formal commentary to the European Commission concerning the Market Integration Package — an expansive regulatory proposal aimed at reinforcing capital market infrastructure throughout European Union member states.
Circle acknowledged the MIP represents a “meaningful step toward a digitally enabled financial system” while emphasizing that multiple provisions require refinement before the regulatory framework can operate effectively in real-world applications.
🚨 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 eligibility for securities settlement activities. According to current draft provisions, exclusively “significant” EMTs would qualify for cash-leg settlement operations — a designation determined by market capitalization benchmarks.
The company noted that no euro-pegged EMT, including its proprietary EURC stablecoin, approaches the stipulated threshold. EURC maintains a current valuation of $1.16.
The Self-Defeating Regulation Dilemma
Circle characterized the regulatory approach as creating an inherent obstacle to market development. When tokens cannot participate in settlement mechanisms until achieving substantial market size, yet cannot achieve that scale without settlement integration, the framework establishes a self-perpetuating cycle that stifles expansion.
“Restricting settlement to ‘significant’ EMTs risks excluding euro-denominated EMTs,” Circle stated, characterizing the thresholds as a “structural barrier to institutional participation and secondary market liquidity.”
As a solution, Circle recommends the Commission implement “adaptive” threshold mechanisms — parameters linked to actual market indicators such as adoption rates and liquidity metrics — rather than fixed numerical limits that necessitate complete legislative revisions for modification.
The firm additionally highlighted concerns regarding the speed of regulatory evolution. It encouraged policymakers to accelerate modifications independent of the comprehensive legislative schedule, reinforcing concerns expressed by tokenization companies in recent weeks that procedural delays might redirect business activity toward the United States, where blockchain-based market infrastructure development is progressing more rapidly.
Expanding DLT Pilot Access and Collateral Framework
Beyond settlement threshold concerns, Circle criticized limitations within the DLT Pilot Regime structure. The current proposal restricts cash account functionality within the regime to credit institutions and central securities depositories exclusively.
Circle advocates for broadening this access to encompass crypto-asset service providers, contending the existing arrangement introduces avoidable operational complications and inefficiencies.
The company further requested more definitive guidance on utilizing stablecoins as collateral instruments, referencing parallel regulatory developments underway in the United States and United Kingdom.
Regarding supervisory architecture, Circle recommended limiting centralized EU-level oversight to a more targeted scope. The firm suggested ESMA concentrate on substantial, cross-border entities, while permitting smaller operators to remain under national regulatory authority.
The cornerstone of European Union cryptocurrency regulation continues to be the Markets in Crypto-Assets Regulation (MiCA), which became operational in December 2024. MiCA has attracted scrutiny from certain legal professionals who characterize it as challenging to interpret and inconsistently implemented across different member nations.
Circle’s EURC represents a MiCA-compliant euro-backed stablecoin offering. 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 distributed ledger technology infrastructure, emphasizing that more transparent, proportionate regulatory standards would enhance operational efficiency and market liquidity throughout the region.
